The word jungle is not perhaps the first that springs to mind when I think of the magnificent scenery in the northern European states. With respect to the different legislation, however, you will quickly find yourself in a legal jungle of paragraphs and clauses. So, I’d like to offer a little insight here.
Commonality: fees can be charged!
Let’s start with the good news – in terms of debt collection, there is one commonality: In all four countries, debt collection fees can be charged to the debtor. But that’s pretty much where the similarities end.
In Sweden, dunning fees are set to SEK 60 (around €5.50). In Denmark, late payers can expect to pay far more. Although the maximum dunning fee is also defined by law here, it amounts to DKK 100 (around €13.00) per reminder and may be charged three times at most. By contrast, light and severe collection fees are charged in Norway. In other words, a fee is defined for the first dunning notice, which automatically doubles after 28 days if it is not paid. However, the amount of the dunning fee permitted by law is currently being discussed and is likely to fall significantly. That represents yet another challenge for international debt collection: Laws, regulations, and rules are never static and always have to be monitored for all the relevant countries to ensure legally compliant and efficient collection.
Sweden and Finland are ideal candidates for debt collection, since everyone here has a social security number (SSN) that can be requested during order submission and account creation. This allows defaulting payers to be easily identified via the SSN. The equivalent to the SSN in Denmark is the CPR number (Central Person Register), but its use in invoicing and collection is not clearly regulated by law. Smart approaches in international debt collection also need to be defined and implemented for these legal gray areas.
The list of differences and idiosyncrasies is almost endless – so we can’t cover all the details here. Instead, I’d like to raise awareness for the complexity of international debt collection among companies that are planning or have already started an expansion of their business activities.
After all, good results can only be achieved in receivables management in each country following diligent planning.