§ 2. What exactly is a debt collection company?
This section defines the most important terms in the debt collection industry. It distinguishes between companies that do debt collection (inkasso) as a job (collecting money on behalf of others) and companies that collect their own unpaid bills. It also establishes that companies that buy up debt from others in order to collect it themselves are running a debt collection business (inkassovirksomhet).
Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська
The text of the law (unofficial translation)
Debt collection business means the commercial or regular collection (inndriving) of overdue monetary claims (forfalte pengekrav) on behalf of others. It also includes buying up overdue monetary claims and in-house collection (egen inndriving) of these.
Debt collector (inkassator) means an enterprise that holds a licence (bevilling) to run a debt collection business.
What does this mean?
This section works as a dictionary for the rest of the Debt Collection Act. It explains exactly what kind of work the law regulates. Without these definitions, it would be easy for companies to find loopholes. The law defines three main things that are covered by the debt collection rules.
First, it defines what a "debt collection business" is. If a company's job is to collect money for other companies — and they do this regularly and to make money (commercially) — they are doing debt collection. These are the classic debt collection agencies (inkassobyrå) such as Kredinor, Intrum and Svea. They don't produce anything themselves; their only job is to clean up when you and I haven't paid our bills to the electricity company or the gym.
Second, the law establishes that "buying up overdue monetary claims" and collecting them is also debt collection. This is a very common practice today. Let's say a bank has 100 customers who haven't paid their credit card bill. The bank can't be bothered to spend time calling and sending letters to these customers. Instead, they sell the whole pile of unpaid debt to a debt collection company (inkassoselskap) for a low price. The debt collection company now owns the debt and tries to collect the full amount from you. The law establishes that this is also subject to the strict debt collection rules.
Third, the law defines the word "debt collector". This is simply the legal term for a firm that has received approval (a licence) from the state to do debt collection. This means that not just anyone can start a debt collection agency in their garage. You must have permission, you must know the rules, and you are subject to supervision (tilsyn) by the Financial Supervisory Authority of Norway (Finanstilsynet).
The law also mentions "in-house collection". If the carpenter you used chooses to send payment reminders (purringer) and debt collection notices (inkassovarsler) himself, instead of using an agency, he is doing in-house collection. Even though he does it himself, he must follow the same strict rules on notices and deadlines as a professional agency.
What does it mean that your debt is sold?
Many people are shocked when they log in to their online bank and see that the debt they had to Bank Norwegian or Komplett has suddenly disappeared, and then get a letter in the post from a company they have never heard of, demanding exactly the same amount.
This is called portfolio purchasing, or the debt changing owner. It is completely legal, and it happens every single day in Norway. The original company sells your debt to get some money immediately, rather than possibly never getting paid.
For you as the person who owes money, this means essentially nothing in legal terms. You owe exactly the same amount, and you have exactly the same rights as before. The new company cannot suddenly double the interest rate, add made-up fees, or cancel the repayment plan (nedbetalingsplan) you had already agreed with the previous owner. The terms follow the debt. The only difference is who you pay, and who you call if you need a postponement.
What happens if you get it wrong?
If you ignore demands from a company that has bought your debt, on the grounds that you don't know them, the debt will just keep growing. They have the law on their side, and they will keep adding interest and legal fees until the amount is many times higher than the original. In the worst case, the matter ends with deductions from your salary.
For businesses doing "in-house collection": If you get the deadlines wrong or charge unlawful fees, the debtor (skyldneren) can refuse to pay the fees, and you lose the right to have your costs covered.
Examples
Jonas took out a consumer loan of NOK 50,000 when he was a student. He struggled to pay, and the loan fell due. After a year, he receives a letter from a company called "Gjeldsoppkjøp AS". They write that they now own his loan and ask him to pay everything to their account number. Jonas gets scared and thinks he has been scammed, because he has never borrowed money from this company. Jonas calls the original bank, which confirms that it has sold his debt. Under the Debt Collection Act, "Gjeldsoppkjøp AS" is now formally the creditor (kreditor) (the one he owes money to), and they are running a debt collection business by collecting it. Jonas sets up a repayment agreement with the new company. The terms are the same as in the original loan agreement.
Sara runs a small hair salon. A customer walked out on a bill of NOK 2,500 after a big colour treatment. Sara doesn't want to pay a debt collection agency to take the case, so she chooses to send a debt collection notice and a demand for payment (betalingsoppfordring) herself. This is called "in-house collection". Since she is doing this, she must follow the rules of the Debt Collection Act on deadlines and notices, even though she is not an official debt collection agency (debt collector). For example, she cannot charge fees higher than what the state has set.
Common mistakes
- Believing the debt has been cancelled because the original bank says "the case is closed on our end".
- Refusing to pay a new company because "I have never signed any contract with you".
- As a small business owner: Believing you can collect your own invoices however you like, without following the Debt Collection Act's rules on deadlines and fees.
- Believing an ordinary law firm is the same as a debt collection company (lawyers can do debt collection, but have their own approval).
What should you do?
When you get a letter saying your debt has changed owner, or that an unknown debt collection company has taken over the case, you should do the following:
1. Check that the amount is correct — Compare the claim with what you originally owed, plus normal interest. If it has jumped by many thousands of kroner overnight, ask for an itemised statement. 2. Confirm the change of owner — Unsure whether the letter is genuine? Call the original bank or company you owed money to, and ask whether they have sent the case to this specific agency. 3. Change the account number in your online bank — Make sure you don't keep paying to the previous owner's old account number. The money can get stuck for weeks while the agency tracks it down. 4. Get in touch to find a solution — Companies that buy up debt have often bought it cheaply. They are therefore very often open to good and flexible repayment agreements. Call them and suggest an amount you can manage to pay each month.