Debt Collection Legislation – Common features in European countries!

Common feature 1: Debt collectors need authorization from national authorities to conduct third-party debt collection against debtors in a country.

In most of the countries in Europe, permission is required to conduct debt collection on behalf of a creditor. The licence applies to debt collection actions against debtors within the country’s borders.

To illustrate: A claim against a German company must, therefore, be recovered by a German debt collector, regardless of the country in which the creditor is located.

Common feature 2: Rules designed to protect debtors against “bad” behaviour from Debt Collectors.

To protect the integrity of the debtors, there are rules for how a Debt collector must behave in their attempts to recover claims.

Exactly how these rules are designed and their sanctions differ in European countries.

Examples of unauthorized methods are e.g. that Debt Collectors are not allowed to contact debtors at improper times during the day. Nor threaten debtors with legal actions without any basis at all.