Oversight of debt collection agencies

You can let us know if you suspect that an agency engaged in extrajudicial debt collection is breaking the law or good debt collection practice. Extrajudicial debt collection refers to actions aimed at persuading a debtor to pay a debt voluntarily, such as sending reminders. You can report, for example, 

• unreasonable recovery costs, 
• efforts to collect a debt that has been challenged, 
• inappropriate response to enquiries, or
• other similar practices that you believe are against the law or good debt collection practice. 

You can also let us know if you suspect that a debt collection agency has failed to register.

We have prepared a special template for reporting violations, but you can also report your suspicions in your own words by email. 

Make sure to include at least 

• your contact information,
• the name of the debt collection agency, 
• a description of how the debt collection agency is, in your opinion, breaking the law or good debt collection practice, 
• details about the debt in question (such as copies of bills, reminders and payment demands), 
• copies of any correspondence in which the debt is challenged and replies of the debt collection agency or creditor, 
• other evidence to back up your allegations, and 
• information about whether you have filed complaints with or notified any other authorities or bodies (such as the Finnish Competition and Consumer Authority or the Consumer Ombudsman, the Consumer Disputes Board, the competent district court, the Ombudsman). 

We carry out inspections based on tips received from the public. We usually build our enforcement cases on a comprehensive body of evidence consisting of multiple reports and covering several different aspects of debt collection practice. We aim to investigate all cases within nine months. We do not necessary react to individual reports. 

Debtors do not enjoy the rights of interested parties in our enforcement cases, and the outcome of our investigations has no direct bearing on an individual debtor’s case. If we find that a debt collection agency has broken the law, we can impose administrative penalties, such as a warning or a temporary closure of the agency. Our main goal is to get the agency to review its practices. 

Our decisions have no direct impact on an individual debtor’s situation and we cannot, for example, stop the debt collection process.

We do not have authority to settle civil claims or disputes between debtors and debt collection agencies or creditors. We cannot, for example, 

• order a debt collection agency or a creditor to lower or adjust their charges, 
• comment on whether a contract is legally enforceable, or 
• award damages. 

Civil claims can be settled in court. 

Our primary goal is to provide advice on debt collection agencies’ legal obligations and good debt collection practice. If we find a debt collection agency guilty of recurring or serious violations, we can impose an administrative penalty. Administrative penalties include, for example, warnings and temporary closures for a period of up to six months. A closure order can apply to the entire business or certain aspects of the operation. 

Our last resort is to remove the debt collection agency from our register, in which case the business must be closed down permanently. All administrative penalties that we impose appear in the public version of our register of debt collection agencies. We have the power to close down debt collection agencies that operate illegally without registration. We can threaten to fine the agency if it fails to comply.

We try to focus our investigations on debt collection agencies that are suspected of serious or systemically significant violations of the applicable laws or good debt collection practice. We usually build our enforcement cases on a comprehensive body of evidence consisting of multiple reports and covering several different aspects of debt collection practice.

Consumers can contact the Finnish Competition and Consumer Authority’s consumer advisors. Individual cases can also be referred to the Consumer Disputes Board, but only after the debtor has first consulted the Consumer Advisory Service. The Consumer Disputes Board can give recommendations as to how a dispute between a consumer and a business, such as a debt collection agency, should be resolved. 

The Consumer Ombudsman is the competent authority for the enforcement of the Finnish Debt Collection Act in respect of consumer debts. The Consumer Ombudsman also handles complaints relating to debt collectors who do not have to register and therefore fall outside of the enforcement authority of Regional State Administrative Agencies. 

Yes. According to the Finnish Debt Collection Act, debtors must reimburse creditors for any reasonable recovery costs incurred. You may end up paying for the costs of both the creditor and the debt collection agency.  

Recovery costs can be charged to the debtor even after they have paid back the capital on the debt. Once a debt has been taken over by a debt collection agency, you cannot escape paying recovery costs by paying the original debt. The collection of recovery costs can also lead to more expenses. 

Recovery costs can also be collected through court or enforcement. The costs claimed must be reasonable and based on the applicable laws.

Yes. If you paid late and the agency had already started the debt collection process before your payment was received, you are liable for its expenses. 

Debt collection agencies usually notify the debtor the day after they begin processing the debt. You can ask the debt collection agency when the process was begun and when your payment was received by the agency or the creditor. 

The Debt Collection Act prohibits charging unreasonable or unnecessary expenses to debtors. If a debt collection agency begins processing a debt without first checking whether the debt has been paid, the expenses incurred can be deemed unreasonable.

There are also cases where a debtor pays the debt more or less exactly when a payment demand is sent out. Whether or not the debtor can be held liable for recovery costs in these kinds of cases depends on the procedural steps taken by the debt collection agency before the payment was received. 

If you paid by bank transfer, the time of payment is, as a rule, determined according to the Finnish Payment Services Act. A payment is deemed to have been made when the funds have been received by the bank where the recipient, in this case either the creditor or the debt collection agency, has their account. The Payment Services Act stipulates that the payer’s bank must pay any funds sent by bank transfer to the recipient’s bank during the following working day at the latest. Any debt collection agency involved must refrain from proceedings for the expenses of which the debtor could be held liable during the day immediately following. 

You can learn more about the determination of liability for recovery costs, for example, by reading summaries of our historical enforcement cases (in Finnish).

You can ask for any extrajudicial debt collection proceedings against you to be suspended if your debt is a consumer debt and the whole amount of the debt is past due. Suspending the extrajudicial debt collection process can help to reduce recovery costs if, for example, you already know that you will not be able to pay the debt. 

Asking for a suspension does not, however, give the creditor an obligation to pursue the debt through court or enforcement. In other words, your request for a suspension does not automatically lead to judicial debt collection but simply stops the extrajudicial debt collection process. 

The debt collection agency can continue to send you letters as long as it is not asking you to pay any more costs. Debt collection agencies also have the right to charge recovery costs for sending letters for the purpose of keeping a debt alive or other reminders or notices that are necessary to register a default or to protect the creditor’s rights otherwise. 

If you feel that you need financial advice in general, you can contact for example the financial and debt counselling services of the state legal aid offices free of charge.

You can challenge the debt by emailing the debt collection agency and explaining why you do not owe the amount in question. To learn more about challenging a debt, you can contact the Finnish Competition and Consumer Authority’s consumer advisors or use the Complaints Assistant tool on the Finnish Competition and Consumer Authority’s website. 

The debt collection agency must stop the extrajudicial debt collection process if you are able to mount a legitimate challenge. The debt collection agency or the creditor whom the agency represents can, however, take the case to court to determine your liability for the debt. 

If you want to challenge a directly enforceable debt, such as a bill from a local authority health care provider, you need to file a material appeal with the competent appeal authority. You can ask the debt collection agency or the creditor for further instructions. You also need to let the debt collection agency know once you have submitted your appeal. Debt collection agencies cannot pursue extrajudicial debt collection after a material appeal has been filed. The competent appeal authority will decide whether or not you are liable for the debt. 

Dubious debts cannot be collected. You have the right to ask the creditor or the debt collection agency for evidence of

• the reason for the debt and the amount, 
• the amounts owed and paid in an itemised format, and
• any interest and costs accrued on the debt. 

You have the right to receive this information once a year free of charge. The creditor or the debt collection agency must provide the information within one month of your request.

Statute-barred debts cannot be collected. If you suspect that your debt has become statute-barred, you have the right to ask the creditor or the debt collection agency to prove you wrong and provide evidence of how the debt has been kept alive. 

It is the creditor’s or the debt collection agency’s responsibility to prove that appropriate action has been taken to prevent a debt from becoming statute-barred. 

You can learn more about statute barring, time limits for pursuing debts and ways to keep debts alive on the Finnish Competition and Consumer Authority’s website. 

If you disagree with the creditor’s or the debt collection agency’s explanation and still maintain that the debt is no longer enforceable, you can challenge it. Debt collection agencies cannot pursue extrajudicial debt collection after a debt has been challenged. However, the creditor or the debt collection agency representing the creditor can take the matter to court. 

The debt collection agency is under no obligation to send you the original bill and it may not even be in possession of the original bill. If you cannot get the original bill from the debt collection agency, you can contact the creditor directly. 

Both the creditor and the debt collection agency have a duty to provide you with documentary evidence of the debt. In some cases, the original documents, such as purchase orders, may have been lost. In such cases, the creditor and the debt collection agency must tell you that documentary evidence is not available and explain what the debt is based on in some other way. The absence of original documentary evidence does not make a debt any less valid. 

If you do not believe that you owe the amount in question, you can challenge the debt. You must provide legitimate reasons for your challenge. A legitimate reason could be, for example, that you did not place the order in question. A debt that has been challenged can no longer be pursued by extrajudicial means and must instead be taken to court. The court determines liability for the debt based on the evidence available. 

You can ask the relevant credit reference agencies (such as Suomen Asiakastieto Oy and Bisnode Finland Oy) to delete incorrect entries from your file. You need to make your request in writing and provide detailed information as to why the entry that you want deleted is incorrect. You can also ask the debt collection agency or creditor that made the incorrect entry to contact the credit reference agency on your behalf. An entry in your credit file can be incorrect if, for example, it relates to a debt that you do not recognise, that you have challenged or that you had paid pack in its entirety before the credit reference agency was notified. 
 
According to the Finnish Credit Information Act, the controller (credit reference agency) must promptly rectify any incorrect, inaccurate, outdated or otherwise misleading entries in credit files and credit reports. In order to ensure the fair treatment of data subjects, credit reference agencies can only delete incorrect entries. The controller must provide a written explanation of any decision to not amend a register entry as requested. 

Compliance with the Credit Information Act is enforced by the Office of the Data Protection Ombudsman, which you can contact with any queries relating to the accuracy of entries in your credit file. The Data Protection Ombudsman can order the controller to rectify any incorrect entries.

The extrajudicial debt collection process must be suspended if you have not received the bill or a reminder due to the creditor’s or the debt collection agency’s having incorrect address details. You can challenge the letter with the debt collection agency on the grounds of incorrect address details and provide the correct details in order to have the information that you need for making the payment sent to your actual address. 

If you move house, you need to let your creditors or any debt collection agencies that you are dealing with know your new address. It is also your responsibility to keep your organisation’s information up to date in the Trade Register. 

Good debt collection practice calls for due diligence from both creditors and debt collection agencies. This includes, for example, checking the basic facts of every case before proceeding with debt collection. However, it is not the creditor’s or the debt collection agency’s responsibility to proactively investigate whether a debtor might have moved house, and instead letters seeking payment can be sent to the address last provided by the debtor. 

If you were unable to pay the debt due to the bill and reminders having been sent to the wrong address, you can refuse to pay any resulting recovery costs. This only applies, however, if you did not provide incorrect address details yourself. 

Your liability to pay the creditor’s costs is not affected if the letter got lost in the post, for example. 

Yes. The debt collection agency is entitled to bill you for any costs incurred from having to refund overpayments if the mistake was at your end. 

It happens sometimes that a debtor pays the same bill twice or otherwise overpays a debt collection agency. Good debt collection practice requires debt collection agencies to promptly refund any such overpayments. 

Whether or not the debt collection agency is entitled to be reimbursed for any costs incurred from having to refund payments depends on who was responsible for the overpayment. If an overpayment can be attributed to the debtor’s carelessness or mistake, the debt collection agency has the right to charge any reasonable costs incurred from having to give a refund to the debtor. If, however, the overpayment was due to the creditor’s or the debt collection agency’s mistake, the agency cannot charge the debtor for any additional work necessitated by the refund process. 

A debt collection agency can only use a debtor’s overpayment towards the debtor’s other debts with the debtor’s consent. 

Try to negotiate a more reasonable amount with the debt collection agency.  

If you cannot reach a compromise and maintain that the costs are unreasonable, you can challenge the amount by writing to the debt collection agency by email, for example. Explain which part of the charge you find unreasonable. Please also indicate why you consider the debt collection charges to be unreasonable. You can also ask the debt collection agency to give you evidence of how the costs were incurred to see if they are in fact reasonable.

The debt collection agency must cease the extrajudicial debt collection process for the part of the debt collection costs that you have challenged. Any part of the costs that you have not challenged can still be pursued, and you therefore have to pay the unchallenged amount. A claim for debt collection costs that has been challenged can no longer be pursued by extrajudicial means and must instead be taken to court. The court determines whether the claim is reasonable and whether you are liable to pay it.

The Debt Collection Act contains provisions on the maximum limit for debt collection costs. In addition, debt collection costs must be reasonable and necessary. Whether or not a claim for debt collection costs is reasonable depends on the amount of work undertaken by the debt collection agency, whether or not the steps taken were necessary and the debt collection agency’s actual costs. The original amount owed by the debtor is also taken into account. Whether or not a claim for costs is reasonable depends on the circumstances in each case. Advice on assessing the legitimacy of claims can be found in, for example, the summaries of Regional State Administrative Agencies’ historical enforcement cases published on our website.

Summaries of historical enforcement cases (in Finnish)