§ 4. Who is allowed to run a debt collection company?
To run a debt collection company (inkassoselskap) in Norway, the firm must be registered in the Register of Business Enterprises (Foretaksregisteret) and have an official licence (bevilling) (approval) from the state. In addition, the company must have "sound finances" — it must own more than it owes. Lawyers and banks can also carry out debt collection (inkasso) under their own strict licences.
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)
A debt collection business (inkassovirksomhet) may only be run by enterprises that are registered in the Register of Business Enterprises and have a licence, unless otherwise follows from the third to fifth paragraphs.
The debt collection licence (inkassobevilling) shall be limited to applying either to the collection (inndriving) of overdue monetary claims (forfalte pengekrav) on behalf of others or to the purchase and in-house collection (egen inndriving) of overdue monetary claims. A limited liability company that has a licence to collect overdue monetary claims on behalf of others commercially or on a regular basis shall be solvent, that is, the value of the enterprise's assets must exceed the enterprise's total liabilities. The same applies when such business is run by a general partnership in which one or more of the partners is a limited liability company, or by a limited partnership in which one or more of the general partners is a limited liability company.
A debt collection business that involves the commercial and regular collection of overdue monetary claims on behalf of others may also be run under a Norwegian licence to practise law (advokatbevilling).
A debt collection business that involves the purchase and collection of overdue claims may be run without a licence by institutions that are entitled to carry on financing activities under the Financial Institutions Act (finansforetaksloven).
A debt collection business that involves the commercial or regular collection of overdue monetary claims on behalf of others may, notwithstanding the first paragraph, be run temporarily by persons who meet the requirements in the Professional Qualifications Act (yrkeskvalifikasjonsloven) chapter 2.
What does this mean?
When you owe money and receive a letter from a debt collection company, it can feel frightening. The company has a lot of power, and it can add fees (gebyrer) and eventually ask the enforcement officer (namsmannen) to make a wage deduction (lønnstrekk) from your pay. Because this power is so great, society has decided that the debt collection industry must be strictly regulated. This section is about the very entry ticket to being allowed to do this work.
First and foremost, the law says that no one can carry out debt collection "off the books" or from an unregistered company in their garage. The company must be formally registered, and most importantly: it must apply for and obtain a debt collection licence. This is the state's seal of quality showing that it is allowed to collect money on behalf of others. The Financial Supervisory Authority of Norway (Finanstilsynet) is the body that grants these licences, and it keeps a close eye on whether the companies behave properly.
Furthermore, the section says that the company must be "solvent" (suffisient). This is an old technical term meaning that the company cannot be on the verge of bankruptcy. The value of what the company owns must be higher than its debts. Why does the law care about this? Imagine that a debt collection company collects 50 000 kroner from you on behalf of your carpenter. You pay the money to the debt collection company. If the debt collection company goes bankrupt the next day — before it manages to pass the money on to the carpenter — the carpenter could, in the worst case, demand the money from you a second time. By requiring debt collection companies to have sound finances, the law protects both you and the person you actually owe money to.
The section also mentions two important exceptions to the requirement for a separate debt collection licence. First, Norwegian lawyers can carry out debt collection under their licence to practise law. Lawyers are already subject to strict ethical and financial requirements. Second, banks and financial institutions can buy up and collect debt without an additional licence, because they are already heavily regulated through the Financial Contracts Act (finansavtaleloven) and are regularly checked by the state.
Why does this matter to you as a consumer?
You may wonder why you should care about the share capital or registration of the company sending you bills. The answer is: your safety.
Now and then, criminal networks, scammers or simply uninformed business owners try to pose as "debt collection agencies" to scare people into paying. They send threatening letters with fake logos, demand sky-high "penalty fees", and threaten that the police will be at your door tomorrow if you don't send money by Vipps immediately.
Because the law is so strict about who may carry out debt collection, you have a very simple tool for exposing such scammers: you can check them. If the firm contacting you does not have a debt collection licence, it has no power. The fees it demands are invalid, and it cannot send your case to the enforcement officer. This protection stops "torpedo" operations and organised extortion.
What happens if the debt collector does not have a licence?
If a company collects money on behalf of others without having a licence, it is breaking the law and can be punished with fines. For you as the person who owes money, the consequence is that the work it does is illegal. You are not obliged to pay a single øre in fees to it. The principal claim (hovedkrav) itself (for example the bill for a sweater you actually bought) does not disappear, but the extra thousands of kroner it demands for "debt collection work" are invalid.
Examples
Eva has ended up in a dispute with a former landlord about her deposit. The landlord is furious and says he will "send his guys after it". A few days later, Eva receives an aggressive letter from a firm calling itself "Oslo Gjeldsinndrivelse AS". It demands 20 000 kroner within three days and adds a fee of 5 000 kroner for the trouble. Eva is frightened, but searches for the name in the Financial Supervisory Authority of Norway's register of businesses online. She finds out that this company does not have any debt collection licence. In other words, it is carrying out illegal debt collection. Eva can therefore throw the letter away (or report it to the police). The company has no legal right to collect the money or register payment default records (betalingsanmerkninger) against her.
Jonas receives a debt collection notice (inkassovarsel) in the post, but the sender is not an ordinary debt collection agency (inkassobyrå) — it is a law firm. Jonas thinks the law firm is trying to trick him into paying expensive lawyer's fees for an ordinary electricity bill. He calls them to complain. The law firm calmly explains that it carries out collection for the electricity company, which it is fully entitled to do under the Debt Collection Act § 4. It assures Jonas that the fees it charges are exactly the same low maximum rates (makssatser) that an ordinary debt collection agency would use, because it must follow the fee rules of the Debt Collection Act even though it is a law firm.
Common mistakes
- Paying a "debt collection fee" to a firm you have never heard of, without checking whether it is genuine.
- Believing that an ordinary accounting firm can carry out debt collection for its clients (it needs its own licence).
- Being frightened by letters that use words like "Notice of enforced collection", even though they come from an unregistered firm.
- As a business owner: Outsourcing debt collection to a tough acquaintance instead of using a legal agency.
What should you do?
If you are unsure whether a letter you have received is from a genuine debt collection company, do the following:
1. Go to Finanstilsynet.no — Use their search field for the "Virksomhetsregisteret" (register of businesses). Enter the name of the company that sent you the letter. 2. Check the status — If they are listed with "Inkassovirksomhet" (debt collection business) as the licence type, they are genuine and regulated. 3. Ask for proof — If you cannot find them, send them an email and ask: "Can you provide documentation that you have a debt collection licence from the Financial Supervisory Authority of Norway?" Dishonest operators will usually back off when they realise that you know your rights. 4. Report it — If someone is carrying out illegal debt collection against you, you can tip off the Financial Supervisory Authority of Norway. They come down hard on this kind of thing.