How much will it cost to get off the Boletín Comercial?

For many Chilean debtors, September 11 of this year brought good news, which has had little press coverage and whose implications have hardly been explained.

The government amended Decree 950, which regulates the Boletín Comercial, Chile’s registry of unpaid debts, run by the Santiago Chamber of Commerce.

The amendment establishes that if a debtor pays what he owes, or clears a bounced check or protested note, he won’t have to pay extra money to disappear from the Boletín Comercial’s database, which many stores and financial institutions use to assess the risk of giving someone credit.

Until now, people and companies that for some reason “landed” in the Boletín had to count on the cost of this procedure, on top of paying the debt, the interest and other expenses.
For example, if someone owed 10 checks of CLP 90,000 each, and they bounced, then to be removed from the Boletín Comercial, besides paying the CLP 900,000 and other charges, he had to pay an additional CLP 24,900 to disappear from the Boletín, that is, roughly an extra 2.77% on top of the debt.

The downside of the amendment is the schedule that has been set for it.
Starting in November 2006, clearing records for amounts under CLP 100,000 will be free. Debts over CLP 100,000 will cost nothing starting in 2008, and only in 2010 will all debtors (whatever the amount) be able to see their reports clean at no cost. The details can be seen on the Boletín Comercial’s official site.

It has always been argued that there was no good reason for clearing a record to cost the debtor anything, and there wouldn’t be one for phasing in this benefit over such a long period either.

As some of you know, I worked at the Chamber of Commerce for 4 years, and I understand how this system works on the inside, so I can explain a few things for those who have already raised their eyebrows.

While clearing a record does have a cost, I have never thought it right for that cost to vary with the size of the debt. In any case, the cost was largely due to the fact that the process requires manual verification, but that makes no sense given the advances in technology.

As for the time it will take for the measure to be fully in place, I think it comes down to what the institutions need in order to implement the change. Indeed, this change will force the clearing process to be automatic, not manual as it is today, which means that institutions, besides reporting overdue debts, will have to report when the debtor has paid.

An important fact that many people don’t know is that many institutions already report that debts have been paid, and in many cases you don’t need to show up with a clearance certificate (which the financial institution normally charges for). You just show up with your ID card and pay for the clearing.

I insist: people will have to keep going to the Boletín’s offices to do the paperwork for a good while yet, even if the paperwork costs 0 pesos.
Personally, I think the Chamber of Commerce will be forced to push the automation of the clearing process in order to cut its operating costs, which is good news in the end.

Another positive externality is that less paper will be used for this paperwork :wink:.