WHAT DOES “GOOD DEBT COLLECTION PRACTICE” MEAN?

Good debt collection practice is a fundamental principle in Danish debt collection law. According to the Danish Debt Collection Act (Inkassoloven), all debt collection activities must be carried out in accordance with good debt collection practice. The purpose is to ensure that debt recovery is conducted in a proper, responsible, and respectful manner.

Good debt collection practice means, among other things, that the creditor or their representative must not use methods that expose the debtor to unreasonable pressure, harm, or unnecessary inconvenience.

At KROMANN Law Firm, we ensure an efficient and legally compliant process, and that your debt collection case is handled in accordance with good debt collection practice. In this way, both your rights as a creditor are protected, while the debtor is treated correctly and responsibly.

BASIC RULES OF GOOD DEBT COLLECTION PRACTICE

Good debt collection practice is based on a number of principles and unwritten standards that together define the framework for lawful and responsible debt recovery. In particular, the following core principles are essential:

The requirement of proportionality
The prohibition of harassment and threatening behaviour
The debtor’s right to privacy
The prohibition of misleading conduct

The principle of proportionality is central and means that the methods used for debt recovery must be reasonable in relation to the size of the debt. Debt collection measures must not be more intrusive than necessary. Threats of bankruptcy for minor claims or repeated unnecessary contact with the debtor may therefore constitute a breach of good debt collection practice.

Good debt collection practice also excludes any form of threatening or harassing behaviour. The debtor must not be subjected to repeated personal or telephone contact, derogatory remarks, unpleasant meetings, or surveillance. Such actions are not only contrary to debt collection rules but may in some cases also be punishable under criminal law.

The requirement of discretion is another important element. The debtor is entitled to have the matter handled confidentially, and it is therefore not permitted to involve family, friends, or other unrelated third parties. Communication must also be carried out in a manner that does not expose the debtor. Letters, envelopes, and personal contact must not clearly indicate debt collection to outsiders, and any in-person visits must respect privacy. Furthermore, it is contrary to good debt collection practice to threaten disclosure of the debt to the debtor’s employer, social circle, or the public.

In addition, good debt collection practice prohibits misleading the debtor by providing incorrect information or making unfounded threats. This may include threats of police reports without legal basis, incorrect statements of applicable law, unjustified threats of credit registration (e.g. RKI), or failure to disclose who is behind the claim.

Compliance with these principles is essential. Failure to comply may result in criticism from the Danish Consumer Ombudsman, damage to the company’s reputation, and in serious cases revocation of debt collection authorisation. It is therefore always advisable to seek legal assistance to ensure proper handling of debt collection cases.

At KROMANN Law Firm, we help you recover your debts in a professional and legally compliant manner in accordance with good debt collection practice, ensuring that the debtor’s rights are respected while strengthening your chances of getting your receivables paid.

DEBT COLLECTION CASES AGAINST BUSINESSES

Debt collection cases can also be pursued against other companies. The rules also apply when debt collection is directed at business entities. Even though the debtor in these cases is a legal person, the same fundamental requirements of legality, proportionality, and respectful conduct still apply.

However, there are specific rules, including the possibility of charging a compensation fee of DKK 310, as well as the option to agree on more reminder fees than the three that normally apply in debt collection cases against private individuals.

At KROMANN Law Firm, we offer specialised legal advice to businesses to ensure that the debt collection process is carried out lawfully, efficiently, and in full compliance with applicable regulations.