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Collection rules

Collection rules

In Denmark, just like our Nordic neighbors, there are strict requirements and rules when it comes to debt collection.

As a creditor, there are requirements for who you can use for debt collection, what fees can be charged, and how often you can send reminders.

There are also rules on how creditors can be contacted.

In this article, we focus on the common debt collection rules that you as a business should be aware of. If you want to read more about debt collection rules in Denmark, we refer you to the Danish Debt Collection Act and Interest Act.

Debt collection startup

If you want to start a debt collection process, this is always initiated with a debt collection notice. In other words, if the debt collection notice has not been sent, a debt collection process may not be initiated.

The debt collection notice alerts the debtor of an impending debt collection process.

It's important that the debt collection notice clearly shows what is owed and that the debtor is in no doubt that it is a debt collection notice. The debt collection notice must also give the debtor a minimum of 10 days' payment deadline - before debt collection can begin.

We recommend that you make use of our free debt collection notice template.

The debt collection notice can be sent by you as a creditor - or by your debt collection agency. It is not a requirement that the creditor sends the debt collection notice before the case is transferred to the debt collection agency. You just need to remember to make the debt collection agency aware that it has not been sent - so the debt collection agency can do it for you.

The debt collection notice is also referred to as a demand letter, a demand notice, a collection letter or a §10 letter (with reference to §10 of the Debt Collection Act on the subject).

Requirements for who can handle debt collection

In Denmark, debt collection rules state that there are only three parties allowed to handle debt collection: the creditor, a debt collection agency or a lawyer.

The creditor is responsible for the entire debt collection process, provided that the creditor complies with applicable requirements and regulations.

If the creditor wants an external partner to help with debt collection, often referred to as third-party debt collection, the partner must be authorized to do so. Authorization to conduct debt collection activities is granted by the police.

If you are not authorized by the police to run a debt collection business in Denmark, you are not allowed to handle foreign debt collection.

In Denmark, there are about 95 authorized debt collection companies that can and may help you with debt collection. The list can be found on Politi.dk.

In addition to authorized debt collection companies, all licensed Danish lawyers are allowed to help others with debt collection. Just be aware that not all lawyers specialize in debt collection and therefore do not offer it as a service in their law firm.

Lawyers who specialize in debt collection often refer to themselves as debt collection lawyers.

Compliance with debt collection law

If you work with debt collection and want to comply with debt collection rules, it is essential that you are familiar with debt collection law.

We will not go through all the provisions of the Debt Collection Act here, but we will point out sections 9, 10 and 12 that we believe you as a company should be particularly aware of in connection with compliance with the usual debt collection rules. 

Section 9 of the Debt Collection Act deals with good debt collection practices. Good debt collection practices state that you must not use methods that expose anyone to undue pressure, damage or inconvenience. 

Clause 9 is broad and open to interpretation. But it's basically about you as a creditor behaving properly - and not carrying out your debt collection in such a way that the debtor is subjected to undue pressure, damage or inconvenience.

Section 10 deals with the start of the debt collection process. Section 10 states that you must send a demand letter (debt collection notice) before debt collection can begin. The debtor must have a deadline of at least 10 days from the date of dispatch to pay the claim - before any further action can be taken.

Section 12 of the Debt Collection Act states that you may not make personal contact with the debtor in places that are not normally accessible, such as your own home. If this happens, the debtor must be notified in writing. The section also points out during which time a debtor may be contacted. 

If you want to comply with debt collection rules in Denmark, it is essential that you are familiar with the provisions of the Danish Debt Collection Act - but in your practical work with debt collection, you must pay particular attention to the three paragraphs above.

Read also: Good debt collection practices

Compliance with the Interest Act

If you deal with debt collection and reminders, the Interest Act is also a law you should be aware of.

The Interest Act, also known as the Act on Interest and Other Matters relating to Late Payment, here you can, for example, in section 9, find information about how much can be charged on reminder fees, how many can be sent - and how long a payment deadline the debtor must have.

Do you need help with debt collection?

At Collectia, we help large and small companies every day with their debt collection - and know the importance of debt collection complying with all applicable rules and requirements in the field.

We offer an online solution where you can create your debt collection cases quickly and easily. Simply upload your unpaid invoices and you're on your way.

Contact us today for a no-obligation chat about debt collection.


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