The Danish Financial Supervisory Authority (The Danish FSA) and Danske Bank have received the second report from the impartial reviewer assessing the bank’s efforts to correct errors in its debt collection system. Danske Bank notes that the report recognizes the progress made by the bank and that customers are being compensated. Danske Bank also recognizes that a number of additional issues question the ability to meet our intended timeline. This is also the reason why the bank is exploring alternative approaches to provide clarity for debt collection customers, as was communicated in April.
On 31 May 2022, The Danish FSA and Danske Bank received the second report from the impartial reviewer. We are content that the impartial reviewer does recognize the progress and results made by the bank during the last seven months, including the implementation of a suspension on debt collection, delivering on customer communication, and the increased number of customers having received compensation.
Since the first report was published, Danske Bank has finalized the payment of compensation to circa 5,500 customers, who had overpaid due to the original errors in its debt collection system. The bank has also recently compensated more than 600 customers for non-negotiated agency fees in relation to property sales (the home issue). Additionally, except for estate and special cases, the bank either has paid or is in the process of paying compensation to customers in relation to five further additional issues and is working on handling the tax issues.
Regarding the issue involving wrongful charging of interest on reminder fees from customers in Denmark we have compensated the vast majority, 424,000, of the 520,000 customers in scope. 271,000 of the compensated customers have received less than DKK 10 in compensation. We are currently looking into how to handle the remaining cases related to bankruptcy, closed businesses, estates and debt reliefs.
The bank does acknowledge the challenge, which the impartial reviewer has identified in the bank’s ability to resolve the remaining issues in the debt collection system as well as the ability to create clarity for the debt customers within a reasonable timeframe.
“We are working resolutely to solve the issues in our debt collection systems and provide clarity for our customers. This work has enabled us to compensate a number of customers and brought us closer to a solution to the original challenges. However, as part of the clean-up of issues related to the debt collection systems, the bank has continuously identified additional issues,” says Peter Rostrup Nielsen, who heads the central unit established to ensure timely, consistent and proactive management of the issues related to the debt collection. He continues:
“We therefore acknowledge the impartial reviewer’s findings, which mirror what we communicated in April 2022 with regards to the increasing scope and complexity of correcting errors in our debt collection. As stated then, we anticipate that this will extend the expected time for resolving the issues related to debt collection in Denmark beyond our intended deadline of 2023. In line with the impartial reviewer, we find this unsatisfactory and can only apologize for the frustration the prolonged clean-up has caused for the affected customers. Because of the delay we are as we communicated in April 2022, looking into alternative approaches to generate a final resolution to ensure clarity for the bank’s debt collection customers.”
Danske Bank expects to present its proposals for the before mentioned alternative approaches to the Danish FSA during this summer.
The bank will continue its cooperation with the impartial reviewer and use the input and assessment in the work to build a strong setup for debt collection going forward.
For an overview of the progress in our efforts to correct errors in relation to the legacy issues, see the latest update.
Please find the report from the impartial reviewer here.