Competition Authority to reduce debt collection bills

MoneyMy Money.Photo: Frank May / NTB scanpix

Debt collection companies collect money in the form of fees set by the state. The Norwegian Competition Authority will change the rules to the consumers’ advantage.

The debt collection companies live by claiming money on behalf of others, and the money they are left with are all the fees that accrue along the way.

According to Aftenposten newspaper, six of the nine largest debt collection companies had an annual average return on equity of 40–75% in the years 2013–2017, compared with 8% for the business sector otherwise.

The good results are due not only to the rising fees, but also to automation and a strong increase in the number of collection cases. The Norwegian Competition Authority wishes now to end the collection companies taking the entire profit, and want competition between the companies to provide a gain for consumers.

‘’We want to give those who have money a motive to choose the cheapest collection companies’’ said chief executive, Martin Wessel, of the Norwegian Competition Authority. The audit proposes that the creditors pay part of the fee, which will make it attractive to choose the cheapest collection. This will benefit the consumers.

Manager, Aleksander Nordahl, of the industry organization, Virke Inkasso, likes the idea.

The Ministry of Justice, which sets the fees, set down a working group in October to review the collection law.

© NTB Scanpix / #Norway Today