B2B Debt Collection Laws: A Creditor's Comparative Guide
Your UK subsidiary has a EUR 180,000 invoice overdue 94 days against a German buyer. Your Texas branch is chasing a USD 220,000 balance from a distributor in Dallas. Your French entity wants to know whether the 10-point statutory interest surcharge applies automatically. Before any of those files move, someone has to know which rulebook governs which claim, and the answer is rarely the one a consumer-side compliance officer would guess.
The Core Distinction: B2B Commercial Debt Sits Outside Consumer Statutes
The first rule of B2B debt collection laws is that most of the famous consumer-protection regimes simply do not apply. Commercial receivables between two businesses are regulated, but by a different body of statutes: commercial codes, late payment directives, sales-of-goods conventions, and jurisdiction-specific licensing rules. Confusing the two frameworks is the single most common procedural error we see on incoming files.
In the United States, the Fair Debt Collection Practices Act (15 U.S.C. Section 1692 et seq.) applies only to third-party collection of consumer debt, meaning obligations incurred by a natural person primarily for personal, family, or household purposes. Section 1692a(5) defines debt in that restricted sense. Commercial debt owed by a corporation, LLC, or partnership falls expressly outside the statute. First-party creditors collecting their own accounts are also exempt from the FDCPA, even on consumer files, though they remain subject to state law.
In the United Kingdom, the FCA Consumer Credit sourcebook (CONC) regulates consumer credit arrears and collection activity. CONC 7 sets detailed rules on fair treatment, forbearance, and harassment. None of it governs commercial invoice collection between two UK companies. In California, the Rosenthal Fair Debt Collection Practices Act (Civil Code Sections 1788 to 1788.33) extends FDCPA-style protections to first-party consumer collectors, but by its own definition at Section 1788.2(f) it applies only to consumer debt. Across the EU, the consumer-protection corpus, including AMLD5 and the Unfair Commercial Practices Directive 2005/29/EC, is built around the B2C relationship. B2B commercial recovery answers to a separate body of rules.
What Actually Governs B2B Recovery
Commercial creditors operate under a layered framework of statutory interest rules, sales-law conventions, jurisdiction and enforcement regulations, and national licensing regimes. The below table sets out the primary split between commercial debt collection laws and their consumer equivalents across the jurisdictions we handle most often.
JurisdictionConsumer regimeB2B commercial regime United States (federal)FDCPA (15 U.S.C. Section 1692)State commercial codes, UCC Article 2, state licensing statutes CaliforniaRosenthal Act (Civ. Code 1788)DFPI Debt Collection Licensing Act (SB 1200, effective 2022) TexasTexas Debt Collection Act (Finance Code Ch. 392)Finance Code Ch. 392 registration + UCC Art. 2 United KingdomFCA CONC sourcebookLate Payment of Commercial Debts (Interest) Act 1998 European UnionConsumer Credit Directive 2008/48/ECLate Payment Directive 2011/7/EU GermanyBGB consumer rules, RDG licensingBGB Section 288(2) + HGB + RDG commercial license FranceCode de la consommationCode de commerce L441-10 + Decree 96-1112 NetherlandsWIK (Wet Incassokosten)Wet Kwaliteit Incassodienstverlening (2024) Cross-border goodsConsumer sales directivesCISG (Vienna Convention 1980)
The Late Payment Directive and Its National Transpositions
The single most important piece of European business to business debt collection laws is Directive 2011/7/EU on combating late payment in commercial transactions. It gives every EU creditor a statutory toolkit that exists independently of the contract. Payment terms between businesses cannot exceed 60 days unless expressly agreed and not grossly unfair to the creditor. Default accrues automatically 30 days after the invoice date, receipt of goods, or acceptance, whichever is later. Interest runs at the European Central Bank main refinancing rate plus a minimum of 8 percentage points. Creditors are entitled to a EUR 40 fixed compensation for recovery costs, with full reasonable costs recoverable on top of that flat sum.
National transpositions vary in severity. In France, Article L441-10 of the Code de commerce raises the mandatory statutory surcharge to ECB plus 10 percentage points and fixes the recovery-cost indemnity at EUR 40. In Germany, Section 288(2) BGB sets the B2B default interest rate at base rate plus 9 percentage points, explicitly higher than the 5-point B2C rate under Section 288(1). In the United Kingdom, the Late Payment of Commercial Debts (Interest) Act 1998 applies Bank of England base rate plus 8 percentage points and a tiered fixed compensation of GBP 40 for debts under GBP 1,000, GBP 70 for debts between GBP 1,000 and GBP 10,000, and GBP 100 for debts of GBP 10,000 or above. These surcharges are not ceilings: they are statutory floors that accrue automatically whether or not the invoice mentions them.
Statutory Interest Rates for B2B by Jurisdiction
The global B2B recovery network relies on knowing exactly which statutory surcharge anchors each demand. The rates below are the default positions where the contract is silent or where the contractual rate is lower than the statutory floor.
CountryB2B statutory default interestSource European Union (floor)ECB refinancing rate + 8 ppDirective 2011/7/EU, Art. 2(6) GermanyBase rate + 9 ppBGB Section 288(2) FranceECB rate + 10 ppCode de commerce L441-10 ItalyECB rate + 8 ppD.Lgs. 231/2002 as amended SpainECB rate + 8 ppLey 3/2004 modified by Ley 11/2013 NetherlandsECB rate + 8 ppBW 6:119a United KingdomBoE base rate + 8 ppLate Payment Act 1998, s. 6 Switzerland5% statutory default, contractual rates prevailArt. 104 OR/CO Japan3% statutory (reviewed triennially)Civil Code Art. 404 (2020 reform) United States (Texas)Contract rate, else 6%Texas Finance Code Ch. 302-304 United States (California)Contract rate, else 10%Civ. Code Section 3289
Cross-Border Sales: CISG, Rome I, and Brussels I Recast
Where the dispute crosses borders and concerns the sale of goods between businesses established in different Contracting States, the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) supplies the substantive rules by default. Articles 53 to 59 fix the buyer's payment obligation, including the rule that payment is due without any further demand once the goods are placed at the buyer's disposal. Articles 71 to 74 allow the seller to suspend performance, avoid the contract, and recover damages, including lost profit, where the buyer commits a fundamental breach. The CISG applies automatically unless the parties have opted out in writing, and more than 95 states are contracting parties.
Applicable law inside the EU is fixed by Regulation (EC) No 593/2008 (Rome I). In the absence of a choice-of-law clause, Article 4(1)(a) points to the law of the seller's habitual residence for sale-of-goods contracts. Jurisdiction and enforcement between EU member states sit under Regulation (EU) No 1215/2012 (Brussels I Recast), which allows a creditor to sue in the defendant's domicile or, under Article 7(1), in the place of performance of the obligation. Brussels I Recast also abolished the exequatur procedure, meaning a judgment from one member state is enforceable in another without intermediate declaration. For uncontested claims, Regulation (EC) No 1896/2006 creates a European Order for Payment that produces an immediately enforceable title across all member states except Denmark.
United States: UCC Article 2 and State Commercial Licensing
US commercial debt collection laws do not live in a single federal statute. The substantive sales framework is UCC Article 2, adopted in every state except Louisiana, which covers formation, price (Section 2-305), payment terms (Section 2-310), and seller remedies on buyer breach (Sections 2-703 to 2-710). Procedural rules on judgment enforcement, attachment, garnishment, and statute of limitations vary by state and typically sit in civil practice codes.
Licensing of third-party collection agents is an increasingly active area. California's Debt Collection Licensing Act (SB 1200, effective 1 January 2022) brought commercial collectors under DFPI supervision for the first time, requiring a license, surety bond, and annual reporting. New York Article 29-H of the General Business Law, together with NYC DCWP Rule 5-77 enforced by the Department of Consumer and Worker Protection, imposes licensing and disclosure duties on collectors operating in the city. The regime in Texas is notably relevant for creditors doing volume south of Oklahoma City.
Texas: Finance Code Chapter 392 and the Commercial Overlay
Commercial debt collection laws Texas are anchored in Chapter 392 of the Texas Finance Code. Chapter 392 requires third-party debt collectors to file with the Secretary of State and to post a surety bond of USD 10,000 before conducting business in the state. Subchapter B sets out prohibited conduct: threats, coercion, harassment, unfair practices, and fraudulent, deceptive, or misleading representations. Although Chapter 392 was originally drafted around consumer debt, its general prohibitions on harassment and misrepresentation have been applied by Texas courts to commercial collection activity, and the registration requirement under Section 392.101 does not distinguish between consumer and commercial collectors.
On the substantive side, Texas Finance Code Chapter 302 sets the usury ceiling at 6% for most commercial transactions in the absence of a written agreement, with higher contractual rates permitted up to the statutory cap that floats with the judgment rate under Chapter 304. Post-judgment interest on commercial obligations runs at the Texas Consumer Credit Commissioner rate under Finance Code Section 304.003, with a floor of 5% and a ceiling of 15%. At this point, creditors with Texas exposure typically reach out. Contact Cosmopolite for a free assessment.
Licensing Regimes That Apply Even to Pure B2B Work
Several European jurisdictions require a commercial collection license regardless of whether the underlying debt is consumer or business. Germany's Rechtsdienstleistungsgesetz (RDG) requires registration with the competent Oberlandesgericht before out-of-court collection services may be offered, including for B2B debts. The Netherlands adopted the Wet Kwaliteit Incassodienstverlening (WKI), effective April 2024, which established a public register for collection agencies and minimum quality standards across both consumer and commercial work. France's Decree 96-1112 of 18 December 1996 regulates extra-judicial recovery and requires written mandates, segregated client accounts, and professional insurance. Denmark's Inkassoloven (Act No. 319 of 1997), Finland's Perintalaki (513/1999), Spain's Ley 5/2019, and Portugal's Decreto-Lei 62/2013 each impose their own licensing or authorisation layers.
In the common-law world, most B2B commercial collection remains unlicensed at the national level. The UK does not license commercial collectors, although FCA authorisation is required for any consumer credit activity. Ireland, Australia, New Zealand, and most of Canada follow a similar pattern: heavy consumer licensing, lighter B2B oversight. This asymmetry makes jurisdiction selection and service-provider vetting an early-stage question on any multi-country file.
How Cosmopolite Handles B2B Commercial Collections
Cosmopolite operates as a creditor-side coordinator across USA, UK, EU, and UAE jurisdictions, with a worldwide correspondent network covering the rest. Every file is triaged against the applicable statutory regime before the first demand letter goes out: FDCPA or Rosenthal exposure on mixed-use claims, Late Payment Directive 2011/7/EU surcharges on EU B2B invoices, CISG remedies on cross-border goods sales, and the correct licensing jurisdiction for the recovery agent handling the file.
Typical out-of-court recovery cycles on commercial files run 30 to 90 days in Western Europe and 45 to 120 days in North America, with Germany and the Netherlands generally at the faster end and cross-border Mediterranean files at the slower end. Where amicable recovery fails, the decision point shifts to forum selection under the applicable jurisdiction rules, enforcement strategy under Brussels I Recast or bilateral treaty, and statute-of-limitations management. Our European cross-border recovery practice handles that escalation in-house across all 27 member states.
Contact Cosmopolite for a free assessment of your case.
Frequently Asked Questions
What laws govern B2B debt collection?
B2B debt collection is governed by commercial statutes, not consumer protection laws. In the EU, Directive 2011/7/EU on late payment sets statutory interest and compensation rules. National commercial codes, the CISG for cross-border goods sales, Brussels I Recast for jurisdiction, and country-specific licensing regimes (RDG in Germany, WKI in the Netherlands, Decree 96-1112 in France) complete the framework.
Are FDCPA rules different for commercial debt?
The FDCPA (15 U.S.C. Section 1692) does not apply to commercial debt at all. Section 1692a(5) limits the statute to consumer obligations incurred primarily for personal, family, or household purposes. B2B commercial debt is regulated instead by state commercial codes, UCC Article 2, and state licensing statutes such as California's DFPI Act and Texas Finance Code Chapter 392.
What are the legal requirements for B2B debt collection?
Requirements vary by jurisdiction but typically cover four areas: licensing or registration where mandated (Germany RDG, Netherlands WKI, France Decree 96-1112, California DFPI, Texas Finance Code 392.101), statutory interest and fixed compensation (EU Directive 2011/7 and national transpositions), contract-law obligations under the CISG or applicable national code, and enforcement rules under Brussels I Recast or bilateral treaties.
