B2B Debt Collection Laws: What Applies and What Doesn't

FDCPADoes NOT apply to B2B — consumer debt framework only

ECB+8ppEU Late Payment Directive — automatic B2B interest

3–10 yrsLimitation periods by jurisdiction

B2B Debt Collection Laws: The Rules Your Competitors Don't Know

FDCPAConsumers onlyNot B2B — different framework entirely

ECB+8ppEU auto-interest≈12.15% per annum B2B 2025 + €40 fixed

€40Fixed recovery costPer invoice all EU states — automatic no demand needed

3–10 yrsUS limitations3yr DE, 6yr UK, 5yr FR, 4yr CA, 5yr FL

UCCB2B US lawUniform Commercial Code — sale of goods framework

Legal framework

1

US B2B framework: FDCPA is out

The FDCPA does not apply to business-to-business debt, period. What governs: (1) UCC for sale of goods. (2) State contract law for services. (3) FTC Act §5 (unfair/deceptive acts) — but enforced by FTC, not individual creditors. (4) State collection licensing requirements — which DO apply regardless of consumer/commercial distinction. (5) Common law fraud and misrepresentation.

2

EU framework: Late Payment Directive 2011/7/EU

Automatic statutory interest at ECB rate + minimum 8 percentage points (approximately 12.15% per annum). Minimum €40 fixed recovery cost per late-paid invoice, due automatically. Payment terms limited to 30 days (60 if expressly agreed). No demand, no filing, no action needed — these rights arise automatically on the due date.

3

Governing law and jurisdiction: two clauses that determine 80% of outcome

Governing law clause: specifies which country’s law applies. Without it: complex conflict-of-laws analysis. Jurisdiction clause: specifies which country’s courts have authority. EU: Brussels I Recast (Reg.1215/2012) enforces jurisdiction agreements. Non-EU: specify ICC arbitration (NY Convention 1958: 170+ states). Two sentences in a contract eliminate months of procedural dispute.

Most B2B creditors lose money to a single preventable mistake: confusing consumer collection rules with commercial ones. The FDCPA doesn’t apply. The EU Late Payment Directive €40 recovery cost applies automatically. Limitation periods vary from 3 years (Germany) to 10 years (Italy) — and the clock runs from the due date.

B2B debt collection laws by jurisdiction

JurisdictionKey ruleLimitation

USA federal (B2B)

FDCPA does NOT apply

UCC + state contract law govern. FTC Act §5 broadly. No auto-interest.

3–10yr by state

EU — Late Payment Directive 2011/7

ECB+8pp automatic + €40

Interest and €40 cost arise automatically on due date. No demand needed.

3–10yr by state

UK — Late Payment Act 1998

BoE+8pp + £40–£100

Retained post-Brexit. Automatic. Same mechanism as EU directive.

6yr (Limitation Act)

Germany — §288 BGB

9pp over base rate

€40 per invoice. 3yr prescription §195 BGB from year-end. Mahnverfahren 2wks.

3 years

Italy — D.Lgs.231/2002

ECB+8pp automatic

40€ indemnità. 10yr prescription Art.2946 cc. Decreto ingiuntivo 2–4 wks.

10 years

What laws govern B2B debt collection?

US B2B: FDCPA does NOT apply (consumer only). UCC + state contract law govern. No automatic interest. EU: Late Payment Directive 2011/7/EU — ECB+8pp interest + €40 fixed recovery cost per invoice automatic. UK: BoE+8pp + £40–£100 automatic. Limitation periods: DE 3yr, FR 5yr, UK 6yr, CA 4yr, IT 10yr. Governing law + jurisdiction clauses = 80% of collection outcome.