The Danish Financial Supervisory Authority has published a guiding statement clarifying how it will apply the “good business conduct” rules to banks’ and lenders’ handling of errors in debt collection, following findings of serious and widespread failings in several banks. The update is intended to remove doubt about what the authority expects when customer-impacting errors are discovered, after errors affected hundreds of thousands of customers who were wrongly charged debt. The statement draws on supervisory work since 2020 examining debt collection in large banks, where inspections identified extensive and serious shortcomings in systems and processes. When a firm identifies debt collection errors that affect customers, it should address the errors and stop actions that may harm customers, including communicating individually with affected customers, immediately implementing and documenting measures to ensure the risk of errors ceases, stopping collection of defective debt where systematic errors are found, informing the Danish Financial Supervisory Authority, setting up clean-up processes, and compensating any losses suffered by customers. The authority notes that all banks and other firms conducting lending activities should consider the statement as its interpretation of the applicable conduct requirements for debt collection.
Danish Finanstilsynet 2025-11-28
Danish Financial Supervisory Authority issues guidance tightening expectations for firms correcting debt collection errors
The Danish Financial Supervisory Authority issued guidance on applying "good business conduct" rules to banks' and lenders' debt collection error handling after significant failings. It clarifies expectations for addressing customer-impacting errors, including halting harmful actions, communicating with affected customers, and compensating losses. All banks and lending firms should consider this as the authority's interpretation of conduct requirements for debt collection.