Regulatory Alerts2012-03-22
Guidelines for the Actual Manager of a Debt Collection Agency
The Norwegian Financial Supervisory Authority issued guidelines clarifying that the actual manager of a debt collection agency bears primary control responsibility for ensuring compliance with the Debt Collection Act and regulations. These duties include identifying risk areas, establishing written procedures, implementing ongoing controls over fees and client funds, and conducting regular reviews of internal processes. The authority mandates that the actual manager must be physically present at the place of business, with specific notification requirements for any changes in leadership or shared responsibilities.
Guidelines for the Actual Manager of a Debt Collection Agency
CIRCULAR: 9/2012 DATE: 22.03.2012 THE CIRCULAR APPLIES TO: Foreign debt collection agencies Branches of foreign debt collection agencies Acquisition/self-collection agencies
FINANS TILSYNET Postboks 1187 Sentrum 0107 Oslo
Guidelines for the Actual Manager of a Debt Collection Agency 2 | Finanstilsynet
It follows from Section 5, first paragraph, letter a) of the Debt Collection Act that a debt collection agency must have an actual manager with personal debt collection authorization. According to Section 6, first paragraph, the actual manager must ensure that the collection of overdue monetary claims is carried out in accordance with the law and regulations.
Finanstilsynet will base its supervisory activities on the assumption that the actual manager's control responsibility particularly includes these duties:
- Identify risk areas in the collection process
- Establish written procedures for the collection process
- Establish ongoing control activities to detect systematic deviations/errors in connection with these areas: • Fee/interest calculation • Wording in demand letters • Timing of sending demand letters • Handling and reconciliation of client funds • Checking client agreements to ensure that any payments to the client are within the limits of legal "pay back" • Follow up on established procedures for the collection process • Ensure that sufficient security is provided
- Ongoing review and evaluation/audit of established procedures and control activities.
The extent and frequency with which the actual manager must perform controls in their business depend on the scope of the debt collection activity. This includes the number of case handlers and their experience, the type of clients the business has, the types of claims the specific debt collection activity collects, and the extent to which various sub-activities in the collection process are automated.
Finanstilsynet must receive written notification when there are changes in the actual management of the debt collection agency. Multiple actual managers at the same office location share joint control responsibility, unless an agreed distribution of areas of responsibility has been reported to Finanstilsynet.
The main rule is that the actual manager must be physically present where the debt collection activity is exercised. Finanstilsynet may approve that a person is the actual manager for more than one office.
Eirik Bunæs director for market supervision Wilhelm Mohn Grøstad section chief
Contact persons: Advisor Linda M. Vestheim-Vigeland, tel. 22 93 97 32, e-mail: linda.marie.vestheim-vigeland@finanstilsynet.no Special Advisor Stein Tore Næprud, tel. 22 93 98 07, e-mail: stein.tore.naeprud@finanstilsynet.no
Guidelines for the Actual Manager of a Debt Collection Agency Finanstilsynet | 3
FINANS TILSYNET Postboks 1187 Sentrum 0107 Oslo POST@FINANSTILSYNET.NO WWW.FINANSTILSYNET.NO