debt collection company
A debt collection company, often also called a debt collection agency, helps its clients and debtors with debt collection, also known as third-party debt collection.
To become a debt collection company in Denmark, you need to be authorized by the police and the people behind the company need to be approved to run a debt collection business.
At the time of writing, there are just over 100 debt collection companies in Denmark, the vast majority of which are classic debt collection companies, while others specialize in other collections within specific industries; flight compensation, banking and the like.
The list of debt collection agencies can be found on the police website and is updated regularly. As a creditor, you can only collect debts on behalf of your own company - not others.
What can a debt collection company do that a debt collection lawyer can't?
Many people mistakenly believe that debt collection agencies have different powers than debt collection lawyers or vice versa - this is not the case. There is essentially no legal difference in the tools that a debt collection company can use that a debt collection lawyer cannot.
The fundamental difference between debt collection agencies and debt collection lawyers is often to be found in the fact that (debt collection) lawyers usually do not work exclusively in debt collection, whereas a debt collection agency deals exclusively with debt collection.
A lawyer is not required to be licensed to carry out debt collection; all lawyers are in principle allowed to help their clients with debt collection.
Few debt collection companies in Denmark serve private individuals, while several debt collection lawyers offer this service.
Read also:
What is the advantage of using a debt collection agency over self-collection?
The opposite of using a debt collection agency would often be for the company to manage the debt collection process itself, also known as self-collection.
There will often be a wide range of benefits, savings and optimizations by using a debt collection company if you as a company have debt collection cases.
A debt collection company can often remove a large number of tasks from the individual company's employees, thus freeing them from both time and resources in their daily work and bookkeeping. In addition, employees are also spared from having to keep up to date with legislation, which is essential to comply with.
Most debt collection companies can often start a debt collection case solely on the basis of an unpaid invoice, so the barriers to getting started with debt collection are often very low. Many debt collection companies today have integrations to the most common accounting programs and online portals where debt collection cases can be created, monitored and closed.
Most debt collection companies in Denmark can help customers every step of the way, from sending reminder letters to the enforcement court. However, the prices of debt collection companies vary significantly.
How to find a debt collection company?
Among the 100 debt collection companies in Denmark, there are many skilled and competent companies. However, you should be aware that some focus exclusively on certain industries, certain companies or have requirements for the number of annual cases and sizes of cases. This does not mean that all 100 debt collection companies are a match for you and your business.
We recommend that you always contact a debt collection agency to find out about the possibilities for your business and to assess whether a collaboration is worthwhile, rather than handling all or part of the process yourself.
