Consumer rights

If you have an unpaid invoice, the creditor will first try to get you to make payment voluntarily. Two weeks after the due date the creditor may send you a demand for payment of the unpaid invoice. A maximum of 5 euros of charges for the demand for payment may be added to the original invoice.

Collection agencies have no more authority than the creditor. A collection agency may send written demands for payment and call you on the telephone, but they may not enter your residence. Written demands for payment may be chargeable up to the collection expenses specified by law. The matter being transferred from the original creditor to a collection agency does not yet result in a bad credit record.

Collection must follow good debt collection practices

When a creditor or debt collection agency collects a debt from a consumer, they must comply with the Act on Debt Collection as well as good debt collection practices.

In the Act on Debt Collection collection refers to all measures taken with the purpose of getting the debtor to voluntarily pay the debt they are due. The Act on Debt Collection does not apply to collection by courts of law or collection through debt recovery proceedings.

According to good debt collection practices, the collection must not result in unreasonable or unnecessary expenses or unnecessary harm for the debtor The Consumer Ombudsman supervises that voluntary debt collection of consumer debt complies with good debt collection practices.

The requirements concerning good debt collection practices apply equally to both the original creditor and any agent acting on their behalf, such as a debt collection agency. If a creditor’s or debt collection agency’s actions are in breach of good debt collection practices, the consumer is not liable to pay for the costs of collection arising from the inappropriate practices in question.

In addition, professional debt collectors are liable to compensate the consumer for financial damages suffered as a consequence of actions that are in breach of good debt collection practices. Such financial damages include e.g. telephone, postal and other expenses incurred by the debtor or other object of debt collection measures as a result of incomplete, ambiguous or unfounded demands for payment.

Compensation may also be claimed from professional debt collectors for other financial damages with a direct causal relationship to the inappropriate debt collection practices. For instance, the consumer may claim compensation for legal costs if the debt collection agent has failed to send the debtor a written demand for payment before initiating collection measures through courts of law.

Debt collection may not cause costs to the consumer through unnecessary actions

According to the rules of good debt collection practices, the timing of collection measures must be appropriate and the actions justified. The following measures could be considered unnecessary:

• Debt collection by mail is unnecessarily extended by sending a third and fourth demand for payment to the consumer. The normal practice is to send two demand for payment letters by post to the consumer. If the consumer fails to respond to these demands for payment by contacting the creditor or debt collection agency, they should proceed to collection through the courts or transfer the matter back to the original creditor.
• Demands for payment continue to be sent without looking into the consumer's justified claims regarding expiration or justification of the debt or verifiable explanations of their financial difficulties. Debt collection agencies are responsible for checking the validity of debts at their own initiative if the creditor has been passive regarding the matter for a long period of time or if the debtor is a minor.
• The creditor or his assignee makes a payment plan with a debtor despite it being obvious that there is little chance that the plan can be followed.

Threatening or pressuring debtors is not allowed

Debt collection must be appropriate in terms of conduct. It may not cause unnecessary harm to the debtor or compromise the debtor's privacy. Making inappropriate threats in debt collection is also prohibited. Examples of inappropriate actions are:

• threatening to disclose the financial difficulties to third parties such as the debtor's employee, members of family or immediate circle
• providing false information regarding the consequences of delayed payment such as stating ”if the payment is not made by the due date, the debtor will get a bad credit record” in the debt collection letter.
• mailing demands for payment in envelopes which clearly indicate that they contain a debt collection letter
• making debt collection visits or telephone calls between 8 pm and 7 am or on holidays.
• combining debt collection with sales promotion to exploit the debtor's difficult circumstances

A person who wilfully acts in breach of good debt collection practices or demonstrates gross negligence in debt collection is guilty of debt collection misconduct. The consumer may report the matter to the police.