Collection laws

The Danish Debt Collection Act, or in common parlance simply the Debt Collection Act, sets out the applicable debt collection rules that apply if you are responsible for reminders to customers for non-payment or are in charge of the debt collection process in your company.

In other words, the Debt Collection Act contains the framework and rules that apply when a debt collection company or you as a creditor are responsible for debt collection.

The purpose of the Debt Collection Act is to ensure that thedebtor (debtor) is treated in a proper manner and thus, for example, not charged too many fees or not given the rightful deadlines to pay the outstanding debt.

The current and applicable debt collection law is from 2014, but is updated periodically.

What is important to know about debt collection law?

Debt collection and the debt collection process itself is regulated by the Debt Collection Act. This means that debt collection companies and creditors must follow the sections and provisions of the Debt Collection Act.

However, as with many other laws, it's important to follow the law in its entirety, including understanding the content of the law so that you don't risk breaking it.

We therefore recommend that you keep yourself updated on the content of the debt collection law.

However, there are a few paragraphs that we here at Collectia want to highlight for you as a creditor, and which are the paragraphs in the debt collection law that are most relevant in the daily work with debt collection.

Paragraph 9

§ Section 9(good debt collection practice): Debt collection activities must be carried out in accordance with good debt collection practice. There has been a long history of case law on good debt collection practice, but basically, good debt collection practice is about showing a certain orderliness in debt collection and not subjecting the debtor to "unreasonable pressure, damage or inconvenience."

Paragraph 10

§ Section 10 deals with the creditor's/collection company's approach to the debtor. Section 10 specifies that debt collection may not be initiated until a demand letter, commonly referred to as a debt collection notice or debt collection notice, has been sent. In some companies, the letter is also referred to as a section 10 letter.

The demand letter/notice of collection must, according to section 10(2) of the Danish Debt Collection Act, clearly state all necessary information so that the debtor can identify the claim. Typically with reference to an unpaid invoice. Next, according to section 10(3) of the Debt Collection Act, the demand letter must specify a deadline for the debtor of at least 10 days from the date of sending the demand letter to pay. In other words, the debtor must be given a new payment deadline to pay the claim.

If the above two points are met; a clear indication of the claim and a payment deadline of 10 days, the demand letter is valid and you can then proceed to the debt collection process if the debtor does not pay their debt within 10 days of sending the letter.

Need help with debt collection?

If you need help with your debt collection, as a creditor you can choose to handle the collection yourself or have an approved and authorized debt collection company handle the process.

Authorization is discussed in chapter 2, section 3 of the Debt Collection Act.

Here at Collectia, we've been helping customers in most of the Nordic region for more than 150 years with their debt collection - and we'd love to help you too.