Debt collection
In May 2019, a comprehensive investigation was launched and the relevant authorities were notified. Since then, we have been working intensely to find a solution to the problems and compensate the affected customers for potential overcollection in relation to their overdue debt. Progress has been made on an ongoing basis, but at the same time, the scope and complexity of the case have increased. This means that the timeline for resolving the issues could extend beyond 2024, which is unsatisfactory for our customers and Danske Bank.
On the basis of extensive analyses, we have therefore worked to develop an accelerated solution that provides clarity for the vast majority of our debt collection customers. This means that a total of approximately 245,000 debt collection customers will be informed that their debt is set to zero and that their debt collection accounts will be closed. At the same time, we will compensate customers for any potential overcollection related to the additional issues on the basis of a data driven model.
To mitigate the fact that using a model is less precise than manual reviews, the model has been designed to increase the level of customer compensation to the benefit of the customer.
We have begun outpayment of compensation based on the model and we expect that the vast majority of customers, who – based on the model – are entitled to compensation will be notified before the end of 2023. Customers, who are entitled to compensation, will be notified directly by the bank.
Customers with accounts transferred for debt collection after we initially suspended our debt collection as of 1 October 2020 are not part of the solution. This is because their debt collection is significantly less affected by the errors in our historical debt collection systems. We will communicate directly to the debt collection customers whose debt we will resume collection of.
Also, a small number of other case types, for instance corporate bankruptcies, are not covered by the accelerated solution. These cases will be subject to a manual review to determine if any overcollection has occurred.
The degree of complexity for the debt collection issue is highest in Denmark, where the analyses have been ongoing for a longer period than in our other markets. We will inform regulators and customers of the approach for other markets at a later stage.