How to Choose the Right Debt Collection Agency in Denmark

Why your choice of agency matters

When a customer does not pay, you can either spend time chasing them yourself or hand the task to a debt collection agency or a lawyer. The right choice can be the difference between getting your money and being left with extra costs, and between your customers being treated properly in your company's name or not.

Start with the legal side: authorisation

Debt collection on behalf of others may only be carried out with authorisation from the Danish National Police (Rigspolitiet) (section 3 of the Debt Collection Act). Lawyers are exempt, as they are subject to the rules for the legal profession. Authorisation requires, among other things, security, a client account for money paid in and an audited annual report. An agency without authorisation may not collect debts for you. Full stop.

All debt collection agencies must also follow the Debt Collection Act's rules on good debt collection practice and letters of demand, enforced by the Danish Consumer Ombudsman, as well as the Interest Act's rules on interest and fees.

Pricing models: understand what you pay

Debt collection agencies typically use one or more of these models:

• No cure, no pay / success fee: you only pay if something is recovered, often a percentage of the amount recovered.
• Fixed price per case: predictable, but you also pay if the claim cannot be recovered.
• Subscription: a fixed monthly amount, often combined with lower prices per case.

Note the difference between what you pay the agency and what the debtor can be charged. The debtor's debt collection costs are limited by the caps in the executive order on out-of-court collection costs, for example DKK 500 excl. VAT for claims up to DKK 1,000 for claims arising after 1 July 2024. Many agencies fund their work through these costs, but ask what you yourself are liable for if the debtor does not pay.

An example price comparison

You have an unpaid invoice of DKK 50,000. Agency A charges a success fee as a percentage of what is recovered; agency B charges a fixed price per case. Work through both models based on your expected recovery rate and claim size, and get the prices in writing, including the costs of any payment order or lawsuit.

Services and specialisation

Some agencies specialise in business claims (B2B), others in consumer claims. Some have extensive experience with many small claims; others with a few large cases. Choose an agency that knows your industry and your type of customers.

Consider which services you need: a reminder service before debt collection, out-of-court collection, payment orders and legal collection, monitoring of old claims, or recovery of claims against foreign debtors.

Communication and how your customers are treated

You should have a fixed contact person and digital access to follow your cases. Just as important is how the agency treats your customers. A respectful, solution-focused dialogue protects your reputation and increases the chance of payment, and it is a legal requirement under the rules on good debt collection practice.

Red flags

• The agency cannot document authorisation from the Danish National Police (and is not a law firm)
• Promises of guaranteed recovery
• Unclear or verbal pricing agreements
• Pressure to sign immediately
• Charging your customers fees above the legal caps

How to get started

Get quotes from at least two or three providers, and compare not only price but also services, reporting and how they communicate with debtors. Consider starting with a few cases to see the collaboration in practice before handing over all your claims.

Conclusion

The right debt collection agency is authorised, transparent in its pricing, experienced with your type of claims and professional towards your customers. Through InkassoHurtig you can get no-obligation quotes from police-authorised debt collection agencies and lawyers and choose for yourself. This content is general information and not legal advice.