The Central Bank supervises the activities of parties to whom it has granted a debt collection licence in accordance with Debt Collection Act No. 95/2008, as well as public entities, commercial banks, savings banks, credit undertakings and investment firms, with the exception of lawyers. The supervision is conducted in accordance with, among other things, Rules No. 981/2016.
The Debt Collection Act applies to first-party and third-party collections of overdue claims. However, the act does not cover the collection of taxes and levies by public bodies and legal collections.
First-party debt collection refers to debt collection warnings pursuant to Article 7. Third-party debt collection refers to debt collection measures that commence after the debtor has received a debt collection warning and before legal debt collection begins. Statutory debt collection refers to debt collection proceedings conducted on the basis of Article 24 of Attorney’s Act no. 77/1998.
A debt collector is to be understood as a legal or natural person that handles debt collection, including repossession.
Debt collectors may only carry out debt collection for others if certain conditions are met:
- if they have received a debt collection licence according to Article 15, cf. Article 4 of the Act;
- if the collection is carried out by an entity with fixed headquarters in Iceland, unless otherwise determined by international agreements that commit Iceland; and
- that professional indemnity insurance according to Article 14 is in force.
Attorneys, law firms and legal entities that are entirely owned by one or more lawyers or law firms, as well as public entities, commercial banks and savings banks, credit undertakings and investment firms, may, however, carry out debt collection without a debt collection licence.
The Central Bank grants licences according to the Debt Collection Act, cf. Paragraph 1 of Article 3 and Articles 4 and 5 of the Act.[1]
[1] Attention is drawn to the fact that in relation to lawyers, law firms and legal entities owned by lawyers or law firms according to paragraph 2 of Article 3 of the Act, the Icelandic Bar Association acts as supervisor in accordance with the Act and the Attorney’s Act.