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Debt collection

In 2004, we introduced a new IT system to process debt collection cases. This resulted in some data errors that unfortunately caused us in some cases to collect debt that was time-barred (out of date) or to collect a larger amount than the customers owed us. The errors also mean that for at large number of our debt collection customers, the registered outstanding debt is incorrect.

In May 2019, a comprehensive investigation was launched and the relevant authorities were notified. Since then, we have been working to understand the causes of the errors and to ensure that we rectify these. We will naturally repay the amount overcollected to the affected customers, but we will also compensate customers for the period during which they should have had the money at their disposal. Moreover, the outstanding debt will be adjusted in a large number of cases, and we are still working to recalculate all customer cases in which the original data errors may necessitate an adjustment of the outstanding debt.

During our investigation of the original data errors, we have unfortunately become aware of a number of potential additional issues that we are still investigating. Customers who may be affected by these will be informed on an ongoing basis. While we continue to investigate the matter, the repayment of debt has been suspended for all cases to minimise the risk of overcollection. Moreover, no interest will accrue until each case has been resolved. Until we have clarity of their outstanding debt again, we have also chosen to withdraw our reports of debt collection customers to the RKI credit reference register, where the amount of the outstanding debt is uncertain.

Not until we have completed our reviews and have made the necessary adjustments in our systems can we accurately calculate the outstanding debt and provide final clarification to the customers. Unfortunately, it is currently the assessment that with the new issues identified, customers would not get clarification before the end of 2024, and with a risk of this work extending into 2025, if further issues are identified. 

We have also initiated preliminary reviews of the debt collection systems in our other markets. Preliminary reviews indicate that issues similar to some of the issues identified in Denmark potentially are also present in Finland, Sweden and Norway. We will complete extended analyses of the debt collection systems, and in that way clarify the potential action towards affected customers.

Number of customer cases at risk of overcollection

We have reviewed 197,000 customer cases in our debt collection system in which there is a risk of overcollection as a result of the original data errors. However, where it was originally estimated that there was a significant risk of overcollection for 108,000 customers, the review has shown that actual overcollection has taken place for 7,800 customers. Those customers are entitled to compensation as a result of the original data errors identified in our debt collection systems.

Numbers below updated on 3 June 2022

Up to 197,000 customer cases at risk of overcollection

Up to 108,000 customers at significant risk of overcollection

All customer cases have been reviewed for overcollection as a result of the original data errors

7,800 customers are entitled to compensation

5,500 have received compensation

Number of customer cases with a risk of adjustment of outstanding debt

We are still working to recalculate all customer cases in which the data errors may necessitate an adjustment of the outstanding debt. This applies to a total of 254,000 customers in Denmark with debt subject to collection, of which 197,000, as mentioned, have been reviewed to ascertain whether overcollection has taken place. For the remainder of the cases, the risk of overcollection is insignificant because the cases have been closed without any repayment of debt. Those cases are therefore reviewed only for incorrect registration of the outstanding debt.

Numbers below updated on 27 April 2022

In up to 254,000 cases, the outstanding debt may have to be adjusted

Timeline

  • A new report of the impartial reviewer on the investigation of the errors in Danske Bank’s debt collection systems is published.

    Read the report (only in Danish) 

  • On 27 April 2022, we receive four orders from the Danish Financial Supervisory Authority in relation to the data quality issues in our debt collection system.

    Read more
    Read our comments

  • The impartial investigation of the debt collection case initiated by the Danish Financial Supervisory Agency, for which KPMG and Poul Schmidt were subsequently appointed to conduct, is extended and expanded. This naturally follows from the work to correct the errors in our debt collection may be extending beyond 2022.

    Read more

  • The report of the impartial reviewer on the investigation of the errors in Danske Bank’s debt collection systems is published.

    Read the report

  • We send follow-up answers to the Danish FSA with a further elaboration of the problem of the erroneous estate cases.

    Read the update here

  • Danske Bank submits a status report to the Danish Financial Supervisory Authority on the work to correct the data errors in the bank’s debt collection systems.
    Read memo her

    Subsequently in August, we send an update to the Danish Financial Supervisory Authority that further details the quality assurance of the review of 5,600 debt collection customers.
    Read update here

    We send follow-up answers to the Danish FSA with an up-to-date status on our analyzes of the additional issues, including the problem of the erroneous estate cases.
    Read the update here

    We send follow-up answers to the Danish FSA with a further elaboration of the problem of the erroneous estate cases.
    Read the update here

  • The DFSA and KPMG/Poul Schmith, the impartial reviewer, extend the review period until the end of October 2021 to better align with all the necessary adaptations of systems and processes as well as the investigation of the additional possible errors identified.

  • On 10 February 2021, we respond to the Consumer Ombudsman’s request for information about Danske Bank’s handling of data flaws in its debt collection systems and use of external debt collection agencies.

    Our response also includes relevant information about specific customer cases as requested by the Consumer Ombudsman.

    Read response
    (The response is available in Danish only).

  • Together with the Danish Financial Supervisory Authority, Danske Bank appoints KPMG and Poul Schmith to conduct an impartial investigation of the measures taken and to be taken by the bank to correct the errors in the bank’s debt collection process and of the bank’s IT systems for debt collection. 

  • The Danish Financial Supervisory Authority orders Danske Bank to arrange for an impartial investigation of the measures taken and to be taken by the bank to correct the errors in the bank’s debt collection process and of the bank’s IT systems for debt collection.

    Read more

  • On 20 October 2020, we provide an account of the measures implemented to ensure compliance with the orders issued by the Danish Financial Supervisory Authority (DFSA).  

    We also inform the DFSA that a total of 28,000 customers have had their debt collection suspended to further minimise the risk of overcollection of debt, while 61,000 customers have been offered to suspend  repayment.

    Read more

  • On 21 September 2020, we receive four orders from the Danish Financial Supervisory Authority in relation to the data quality issues in our debt collection system.

    Read more

  • To further minimise the risk of overcollection of debt, we suspend collection in some 17,000 debt collection cases until they have been reviewed as part of the ongoing efforts to remediate the errors identified in the debt collection system. We also suspend interest accrual on all active debt collection cases unless it has been verified to be correct.

    Read more

  • We submit its response to the Danish Financial Supervisory Authority’s (DFSA) request for further information about Danske Bank’s handling of the errors found in its debt collection system, which we have been working on since May 2019. 

    The response includes a description of the root causes of the errors identified, the historical knowledge about the data errors, Danske Bank's handling of the errors and the extent of the problem.

    Read response

  • We begin informing customers affected by overcollection directly by letter and begin paying compensation. We also publish information about the issue on danskebank.dk

  • During May 2019, we initiate an extensive analysis of the root causes of the issues with the debt collection system.

    Tasks are initiated to ensure that all aspects of the system flaws are investigated and rectified, in particular with the purpose of identifying all financially affected customers in order to compensate them in full.

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Media, investors & analysts

Press releases on the issue:
 
3 June 2022: Danske Bank takes note of conclusions in impartial reviewer’s report
27 April 2022: Danske Bank is exploring new approaches to provide clarity for debt collection customers
23 Feb 2022: Update on the remediation of legacy issues
3 Nov 2021: Danske Bank compensates a total of 7,800 debt collection customers and suspends debt collection for all debt collection customers due to the identified additional issues
3 Sep 2021: Update on the remediation of legacy issues
30 June 2021: Danske Bank compensates customers in debt collection case
22 Dec 2020: Reply to the Data Protection Agency’s request regarding GDPR
11 Sep 2020: Response to the DFSA on errors in the debt collection system
10 Sep 2020: Suspension of debt collection for 17,000 customers

You can also visit our news archieve or see supervisory reations