Blocked Accounts of Citizens ? Corrective Measure for Financial Illiteracy

Problem of over-indebtedness of the general public sector is increasing problem of the last decade both in Croatia and in other European countries. Solving the problem of over-indebtedness requires a complex and comprehensive approach that includes consideration of all the circumstances that have motivated these negative trends, and the consequences thereof. The opening of markets, development of new products and services created a gap between the knowledge and skills of citizens and the availability of these incomprehensible products. Although the financial market has drastically changed, and thus the volume and characteristics of financial products in offer, the financial literacy of citizens has been neglected. This development has led to very high rates of indebtedness which eventually resulted in blocked accounts of citizens. Stepping in detail the issue of blocked accounts will reflect the amendments to the legislative framework as the legal framework is an important stronghold for attempt to find ways of collection in these circumstances. But it doesn’t stop on the protection of the rights of creditors because, also a great attention is paid to the debtors and a way to ensure a normal life, limiting shape and size of funds that can be taken with a blocked account. FINA as a financial agency in a role of mediator conducting blockade has a key role in the implementation of legislative provisions governing this area. In this paper we aim to show how the blockage of accounts is carried out, the communication flow of the entities involved and the order of implementation of all processes that can occur. Analysing the present adverse trends of increased number of blocked accounts in the Republic of Croatia we will look to find other corrective and preventive measures that can contribute to improving of the current situation.