On a recent Wednesday afternoon, Montserrat Vila sat in her Barcelona apartment, waiting for the bullfighters to appear. They were not coming to show off some capework in her living room. In fact, they were not real bullfighters at all. The three men, dressed like matadors in garish tight pants and embroidered jackets, were coming to collect a debt. It’s safe to say that at the same time elsewhere in Spain, a monk, a Zorro, a clown and a Pink Panther were doing the same thing.
Because of the country’s lax debt laws, the judicial route for lenders to recover what’s owed to them is slow and tortuous, so many lenders turn to a more direct approach–tapping into the Spaniard’s fear of public humiliation. As a result, companies offering costumed collectors who recoup debts simply by showing up at a home or office and embarrassing the debtor in question have proliferated over the past couple of decades. Now, though, the Spanish parliament has approved a proposal to regulate the debt-collection industry, possibly bringing an end to the tradition of collection via humiliation.
Many people welcome the move. “In this country, they treat people who owe money worse than criminals,” says Vila, 49, an employee of a health-insurance company. Earlier this year, she fell behind on her mortgage payments. In March, she received a call from a collection agency that said it was working with the bank that had issued her mortgage and informed her that the next day it would be sending bullfighters to “take up a collection” on her behalf from her neighbors. “I’m a serious person. I’ve paid my bills my whole life,” says Vila. “This is a really painful situation to be in.”
That discomfort is exactly what the agencies count on. The idea of using costumed collectors dates from the 1980s, when one company, El Cobrador del Frac (Tuxedo Collector), began sending out agents dressed in black tie and driving cars emblazoned with the company logo. Others followed, in ever more extravagant getups, all of them banking on the debtor’s sense of shame. “Personal honor, your public image, is still very important in Spain,” says José Romero of Zorro Collectors. “If one of our agents shows up at an apartment, everyone in the building is going to know there’s a debtor there.”
In many cases, the collectors don’t say a word but simply follow their targets down the street or sit at a table next to them in a restaurant. “We don’t think of it as humiliation so much as making something public,” says Miguel González of the Cobradores del Monasterio, whose agents wear monks’ cowls. The tactics work. El Cobrador del Frac now has 400 employees across Spain. Its commercial director, Juan Carlos Granda, says the company has a 63% success rate. And with the default rate skyrocketing–it reached 3.8% in January, up from just below 1% the year before–“we’ve seen about a 20% increase in business in the past year,” Granda says.
The collection companies say they mainly go after “professional” debtors, people intent on gaming the system, “not families who don’t earn enough to get to the end of the month,” says Granda. But at Spain’s Consumers’ Union, advocates hear plenty of complaints from ordinary individuals. “I don’t think these collection agencies are turning away clients,” says José Carlos Cutiño, a judicial adviser for the organization. “And the line that they walk between persuasion and threat–between legal and illegal–is very fine.”
The new bill is intended to make that line brighter. Presented in a committee of the lower house of parliament on March 10, it’s designed, according to spokesman Josep Sánchez y Llibre, “to protect citizens against those acts that attack their dignity or invade their privacy.” It won the committee’s unanimous support–a critical step to becoming law.
Until then, Vila waits to meet her costumed fate. The threatened toreros didn’t appear that afternoon, but she is ready for them whenever they do: with a garden hose set to spray from her apartment balcony. “I owe money, that’s all. I’m not ashamed of that,” she says. “They’re the ones who should be ashamed.”
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