§ 31. When a debt collection licence can be revoked

§ 31 is about when a debt collection company can lose its debt collection licence. A debt collection licence is the permission that gives the company the right to run a debt collection business (inkassovirksomhet) under § 5.

To revoke a licence means to take the permission back. It is a serious measure. A debt collection company that loses its licence cannot simply carry on as before. That is why the law requires that it must be “inadvisable” to let the business continue under the licence.

Inadvisable means that it is not responsible or advisable. It is not enough that the company has made a small mistake. The question is whether the error, the shortcoming or the situation means that the company should not be allowed to continue doing debt collection (inkasso) with a public permission.

The section lists four grounds. First, a licence can be revoked if the licence holder has not complied with its duties under § 6. Second, if the conditions for getting a licence are no longer present. Third, if the company does not fulfil conditions to be a member of a complaints board scheme within the deadline. Fourth, if there are other special reasons.

This shows that a debt collection licence is not only about meeting the requirements on the day you apply. The company must continue to meet the requirements. If the basis falls away, the licence can also fall away.

What do the duties under § 6 mean?

§ 6 says that holders of a debt collection licence must ensure that the conditions in § 5 are met when debt collection is carried out. They must also ensure that the business is run in accordance with §§ 8 to 12, that orders (pålegg) under § 30 third paragraph are followed, and that the business is otherwise conducted lawfully.

These are broad duties. This means the licence holder is responsible for more than just formalities. The company must ensure good debt collection practice (god inkassoskikk), a correct debt collection notice (inkassovarsel), a correct demand for payment (betalingsoppfordring), proper assessments before collection through the courts (rettslig inndriving), and lawful operation.

If the company does not do this, it can in serious cases lead to revocation. This could be, for example, systematic breaches of good debt collection practice, unlawful fees (gebyrer), failure to assess objections (innsigelser), or the company not following orders from the Financial Supervisory Authority of Norway.

What does it mean that the conditions are no longer present?

To get a debt collection licence, the company must meet the conditions in § 5. These concern, among other things, suitability, police certificate (politiattest), actual manager (faktisk leder), a fixed place of business and security.

If these conditions are later no longer met, the licence can be revoked. This can happen if the actual manager leaves without a new approved manager being in place. It can happen if the provision of security (sikkerhetsstillelse) falls away. It can happen if the management or owners are no longer considered suitable. It can also happen if the company is no longer run from a fixed place of business within the EEA, where the law requires this.

This is logical. If the company only got the licence because the conditions were met, it cannot keep the licence when the conditions no longer exist.

What does a complaints board scheme mean?

§ 5 allows conditions to be set in the licence that the company must be a member of a complaints board (nemnd) scheme under § 22. A complaints board scheme gives debtors (skyldnere) a way to complain in debt collection disputes.

If the Financial Supervisory Authority of Norway has set such a condition, the company must follow it. If the company does not join the complaints board scheme within the deadline, the licence can be revoked under § 31 letter c.

This makes the complaints scheme more real. A debt collection company cannot simply ignore a condition about complaints board membership and at the same time keep its licence without risk.

What does “other special reasons” mean?

Letter d is a safety valve. It says that a licence can be revoked if there are other special reasons.

This means the law does not try to list absolutely everything. Situations may arise that make it inadvisable to let the company continue, even if they do not fit perfectly into letter a, b or c.

“Special reasons” means there must be something more than a trifle. It must be a reason with weight. For example, serious matters relating to operations, trust, finances, management or breaches of rules.

This type of rule gives the Financial Supervisory Authority of Norway flexibility, but also responsibility. It must not be used arbitrarily. There must be a specific and legitimate reason (saklig grunn).

What happens if the licence is revoked?

The company then loses the right to run the debt collection business that the licence covers. This can have major practical consequences for the company, its customers and ongoing cases.

Creditors (fordringshavere) who use the company may have to move their cases to another debt collector (inkassator). Debtors should get clear information about who they should deal with going forward.

If you receive a claim from a company that has lost its licence, you should be extra careful. Ask for documentation of who is now handling the claim, where payment should be made, and what basis the new party has.

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If you are a debtor and experience serious or repeated errors from a debt collection agency (inkassobyrå), you should document everything. Keep letters, emails, payment receipts and replies.

First complain in writing to the debt collection agency. If the case concerns fees, notices or good debt collection practice, consider a complaints board review (nemndsbehandling) under § 22.

If the case seems systematic or serious, the Financial Supervisory Authority of Norway may be relevant as the supervisory authority. Describe specifically what has happened. Do not just write that the debt collection agency is bad. Show dates, claim numbers, errors and documentation.

If you are a creditor, you should keep an eye on the debt collector you use. Check that the company has a licence, security and proper procedures. A debt collection agency that loses its licence can cause problems for you too.