Legal Updates

Enforcement and collection proceedings against a person who is not the debtor constitutes defamation

July 27, 2021

Due to a typo, enforcement procedure was opened against a person who is not the real debtor and collection proceedings were taken against him which caused emotional distress and damage to his reputation.

The Court accepted the claim and held that the opening of the enforcement procedure and the collection proceedings against a person who is not the real debtor is negligence and defamation. Defamation exists, inter alia, when a publication is made that may humiliate a person in the eyes of others or demean the person due to acts, behavior or traits attributed to such person. Opening an enforcement procedure, imposing foreclosures on bank accounts and restrictions imposed on debtors during an enforcement proceeding may indicate that the person against whom the proceedings were conducted does not honor his obligations or that his financial situation is dire. Therefore, their imposition is detrimental to a person's good name and integrity because they may put the person in a demeaning status or cause ridicule in the eyes of others. Here, the person is an accountant who had to deal with an enforcement procedure opened against him due to a mistake and although he was not the real debtor he was defined as one that does not respect his financial liabilities to a point that creditors were forced to take collection proceedings against him such as: foreclosures at several banks, foreclosure of his vehicle and imposition of severe restrictions such as: restriction on obtaining a passport or a driver's license, a restriction on leaving the country and he has even been declared a special restricted customer at the bank. Therefore, the publication of foreclosures, charges and restrictions under these circumstances is publication that constitutes defamation and entitles to compensation.