§ 32. Penalties for breaching the Debt Collection Act

§ 32 is the penalty provision in the Debt Collection Act. It states which breaches of the Act can lead to penalties. The penalty can be fines, imprisonment for up to three months, or both.

This is not the rule you would normally use if you have been charged an incorrect debt collection fee. In that case it is often more natural to look at §§ 17, 22 or the rules on good debt collection practice. § 32 is about the serious cases where breaches of the law can have criminal consequences.

The section distinguishes between two groups of breaches.

The first group is in letter a. It covers breaches of §§ 4, 5, 6 and 28, regulations (forskrifter) issued under §§ 6 or 20, orders (pålegg) from the Financial Supervisory Authority of Norway (Finanstilsynet) under § 30 third paragraph, and prohibitions under § 30 fourth paragraph.

These are rules about the right to carry out debt collection (inkasso) in the first place, the conditions for a licence (bevilling), the duties of licence holders (bevillingshavere), the duty of confidentiality (taushetsplikt), requirements in regulations, and requirements from the Financial Supervisory Authority of Norway. Breaches of such rules are serious because they concern the control of the entire debt collection business (inkassovirksomhet).

The second group is in letter b. It covers §§ 8, 9, 10 and 11. These are the rules on good debt collection practice, the debt collection notice (inkassovarsel), the demand for payment (betalingsoppfordring) and duties before collection through the courts (rettslig inndriving). For these rules, more is required before a penalty becomes relevant. The breach must be gross or have happened repeatedly.

This means that not every small mistake in a debt collection notice automatically becomes a criminal case. But if the debt collector (inkassator) systematically sends incorrect notices, puts unreasonable pressure on debtors (skyldnere), or grossly breaches the notice rules, § 32 may become relevant.

The second paragraph states that negligent breaches are punished with fines. Negligent means that someone has not been careful enough. They did not necessarily have to break the law on purpose. If they should have understood that the act was unlawful, fines may still be relevant.

Which breaches can lead to fines or imprisonment?

The most serious breaches can lead to fines or imprisonment for up to three months. The Act also states that both can be used at the same time.

Breaching § 4 is about running a debt collection business without meeting the conditions. For example, someone may be carrying out debt collection without the necessary licence.

Breaching § 5 is about the conditions for a debt collection licence (inkassobevilling). If the company does not meet the requirements, or gives incorrect information to obtain a licence, this can be serious.

Breaching § 6 is about the duties of holders of a debt collection licence and lawyers. They must ensure that the business is run lawfully and in line with key rules.

Breaching § 28 concerns the duty of confidentiality. Debt collection cases can contain private and sensitive information. Unlawful sharing of such information can therefore be punished.

Breaching an order or prohibition from the Financial Supervisory Authority of Norway is also a criminal offence. If the Financial Supervisory Authority of Norway says that a debt collection company must change its practice, the company cannot simply ignore it. If the Financial Supervisory Authority of Norway has prohibited the business, the company cannot continue.

Why are the conditions stricter for §§ 8 to 11?

§§ 8 to 11 are about how debt collection is to be carried out towards the debtor. They are important rules, but they are used in a very large number of cases. Mistakes can happen.

That is why § 32 states that breaches of these provisions can only be punished if the breaches are repeated or gross.

§ 8 concerns good debt collection practice. This is a broad rule. It states that debt collection must be carried out properly, and that no one must be subjected to unreasonable pressure, harm or inconvenience. Because the rule is based on discretion, it makes sense that a penalty requires more than a simple mistake.

§ 9 concerns the debt collection notice. § 10 concerns the demand for payment. § 11 concerns duties before collection through the courts. These are formal and practical rules. A single mistake can have other consequences, for example that the debtor does not have to pay debt collection costs (inkassokostnader). But a penalty requires the mistake to be gross or repeated.

“Repeatedly” means that it has happened several times. This can point to poor practice or system errors. “Gross” means serious. It can be a single case that is so serious that a penalty may be considered.

What does a negligent violation mean?

The second paragraph states that any person who negligently violates the first paragraph shall be punished with fines.

Negligence means that the person or company has not been careful enough. They may have been expected to understand the rules. They may have had poor routines. They may not have checked something they should have checked.

This is important because debt collection companies are professionals. They cannot say they “did not know” about basic rules. If you carry out debt collection, you must know the Debt Collection Act. You must have routines that prevent breaches.

Negligent breaches lead to fines, not imprisonment, under the second paragraph. Imprisonment is linked to the first paragraph and the more serious intentional violations.

What happens if a debt collector breaks the law?

There can be several types of consequences.

First, the debtor may not have to pay debt collection costs. This follows in particular from § 17. If the debt collector breaches good debt collection practice or the notice rules, the liability for costs may fall away.

Second, the case can be dealt with by a complaints board (nemnd), if the conditions for complaints board review (nemndsbehandling) are met. The complaints board can assess whether the debt collector has breached the Debt Collection Act.

Third, the Financial Supervisory Authority of Norway can follow up the company. It can issue orders, prohibit the business or revoke the licence.

Fourth, serious breaches can be punished under § 32. This is the strictest route.

If you believe the debt collection agency has broken the law, you should first document the mistake. Keep the debt collection notice, demand for payment, envelope, emails, text messages, payment receipts and other communication.

Write to the debt collection agency. Explain specifically what is wrong. For example: “I did not receive a debt collection notice with a 14-day deadline.” Or: “You continued the collection after I documented payment.”

If the case concerns your debt collection costs, write that you dispute the costs. If the case concerns unreasonable conduct, refer to good debt collection practice in § 8.

If the mistake seems gross or systematic, the case may also be relevant for the Financial Supervisory Authority of Norway. You should then describe the pattern, not just how it felt. Dates and documents are important.