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Debt collection rising across Sweden

Around eight million debt collection notices were sent out in Sweden last year, an increase over the year before, according to a trade group. A greater willingness to buy on credit these days means more people are unable to pay off their debts.

Debt collection rising across Sweden
Photo: Shutterstock

The debt collection sector has enjoyed strong growth over the past few years. Intrum Justitia, one of Europe’s biggest credit management companies, saw a pre-tax profit of 1.2 million kronor ($140.4 million) last year – an increase of 20 percent over 2013.

While the situation in Sweden has not been that dramatic, the sector has seen steady, gradual growth. In Sweden, collection notices in mailboxes are becoming increasingly common.

“The growth in the number of credit purchases throughout the society has resulted in a situation where more people are unable to make their payments on time,” Claes Månsson, spokesman for the debt collection trade group Svensk Inkasso, told Swedish public radio SR Ekot.

While many people are able to pay immediately when the collection letter arrives, for some, keeping up with the penalty interest payments is difficult. This is especially a problem for people with low or limited incomes.

“Interest rates on debt can be between eight and 24 percent and then there are all the fees,” Olle, a retiree, told SR Ekot. “A debt that started off being 39 kronor can quickly get up to 3,900 kronor.”

He wants collection agencies to stop imposing what he calls “sky high” penalties.

But he has not got much support from the Data Inspection Board, the public authority that ensures that debt collection rules and regulations are followed by companies.

“Based on our supervisory activities, our experience is that by and large, companies follow good collection practices, especially the larger firms,” said Malin Fredholm, a lawyer with Datainspektionen, told SR Ekot. 

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What happens if you don’t pay a bill in Sweden?

Sweden's Enforcement Authority is responsible for collecting unpaid debts, fines, and declarations of bankruptcy. So, what happens if an unpaid bill reaches the Enforcement Authority, and can you do anything if you have a black mark on your record?

What happens if you don't pay a bill in Sweden?

What happens when you have a bill?

Usually, if you have a bill in Sweden, you will receive an invoice (faktura) either digitally or via post, which will include details such as the amount owed, who to pay and the date payment is due (förfallodatum).

If you don’t pay the invoice in time, the person you owe money to may turn the case over to inkasso, or a debt collection agency, who will again send you an invoice for payment, plus the agency’s fee.

If this invoice goes unpaid, the Enforcement Authority will get involved.

The Swedish Enforcement Authority, Kronofogden in Swedish, is responsible for collecting unpaid debts. It does this by providing advice and support to those who are unable to pay their debts, as well as helping creditors – such as, for example, landlords whose tenants have not paid their rent.

The debt collection agency will pass unpaid bills on to them, and you may receive a betalningsanmärkning or black mark on your credit record.

Before you receive a black mark, however, you will first receive an ansökan om betalningsföreläggande from the Enforcement Authority. If you pay this in time, your debt will not be registered as a betalningsanmärkning.

There are some types of payment where you can receive a betalningsanmärkning without the bill going through a debt collection agency first. These are usually payments owed to the state, such as unpaid tax, unpaid student loan repayments or unpaid municipal parking fees.

You are unlikely to come into contact with the Enforcement Authority unless you miss or forget to pay a bill.

What happens if you get a black mark?

A black mark can have pretty major consequences – it can stop you from hiring a car, getting a credit card, borrowing money (including getting a mortgage), taking out a phone contract or even renting an apartment, as well as barring you from ordering anything on credit or paying via invoice.

This is due to the fact that whenever you apply for a loan or credit in Sweden, the lender will check your credit score (kreditupplysning) to see if there is any risk of you not paying up. Many lenders have a strict policy on not lending to individuals with black marks on their credit score to minimise risk, no matter whether the mark is due to an unpaid phone bill or a missed mortgage repayment.

How can I check if I have one?

You can check if you have a black mark by contacting a credit check company – here is a list of all credit check companies in Sweden. Some may charge a small fee for the service, whereas others offer it for free.

One advantage of checking your own credit score before contacting a lender is that your credit score is not affected when you carry out a check on yourself. 

If, however, a bank carries out a credit check on you, this can affect your credit score – it’s usually not an issue if you carry out one or two checks, but a lot of checks in a short period of time could cause issues.

Can you do anything to remove it?

Unfortunately, no. 

All you can do is wait – a black mark will disappear from your record after three years for private individuals or five years for businesses. 

The best strategy is to avoid getting a black mark on your record in the first place – such as by paying your bills via autogiro (direct debit), keeping an eye on your post (as well as your digital post), and paying for items up-front if possible to avoid invoices, rather than using “buy now, pay later” credit services such as Klarna or Clearpay.

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