What does a debt collection company do?

What does a debt collection company actually do?

All companies, from sole traders to multinationals, have the problem that some of their bills are not paid within the agreed time. If a company is not able to collect a payment through its own reminder systems, because it is unable to contact the defaulting customer or the payment is still outstanding, it can outsource it to specialist service providers known as debt collection companies. A debt collection company attempts to contact the customer and find an amicable solution for the outstanding claim. If no payment agreement can be reached, debt collection companies can take legal steps, such as court collection processes and legal enforcement.

How can I find out if a debt collection company is reputable?

On the one hand, in accordance with the Legal Services Act (Rechtsdienstleistungsgesetz), all debt collection companies in Germany must be registered as legal service providers with the relevant authority, normally the regional or higher regional court, and recorded in the register of legal service providers. Approval as a registered legal service provider is linked to the suitability, reliability and theoretical and practical expertise of the responsible personnel within the company, among other things. You can check the approval online at any time at the Register of Legal Service Providers. On the other hand, the majority of German debt collection companies have joined together in the Bundesverband Deutscher Inkasso-Unternehmen e.V. (BDIU – Federal Association of German Debt Collection Companies). The BDIU sets strict standards for all its members in terms of legal compliance, reputable behaviour and transparency in dealing with consumers. You can find more information and a list of all the association members at www.inkasso.de.

And who are PAIR Finance?

We are a modern digital company aiming to update the debt collection market with an optimum combination of reliability and professionalism for companies and consumers. Our individualised communication and offers of suitable solutions for all consumers allow use to achieve respectful agreements between the company and its customers. As a debt collection company, PAIR Finance is, of course registered under the Legal Services Act and an active member of the BDIU.

Where do the additional debt collection fees come from?

If you have not paid a bill by the agreed deadline or responded to a reminder from the company, you are in default. In accordance with sections 286 and 280 BGB (German Civil Code), the creditor of the bill – who is your contract partner – therefore has the right to compensation for the damage caused to it by the payment default. This also includes costs, for example, for commissioning specialist partners such as solicitors and debt collection companies. The level of default damages a creditor can apply for commissioning a debt collection company is set out by law in Germany. In accordance with section 4, para. 5 of the Introductory Act to the Legal Services Act (RDGEG), the default damages for commissioning a debt collection company is limited to the level of the payment due to a solicitor in accordance with the provisions of the Lawyers Remuneration Act (RVG). Therefore, we charge our services in accordance with the rates set out in the RVG. These default damages are payable by you. We at PAIR Finance believe that those who pay their outstanding debts quickly or conclude a payment agreement should not be charged with debt collection fees in accordance with the statutory rates in the RVG. So the amount we charge at the beginning at the process is regularly substantially below the statutory levels allowed. However, if an agreement cannot be reached and our administration costs continue to rise, we may, under some circumstances, be forced to charge the costs incurred for further processing.
Why have I been contacted by PAIR Finance?

I have been contacted by PAIR Finance. What should I do now?

If you have been contacted by us, you have an outstanding bill with the company named in the e-mail or the letter which has not yet been paid. Use the payment options set out in our message, give us a call or write to us to agree payment of the outstanding amount and bring the debt collection process to an end. Even if you believe that the claim is not valid because you have already paid it, returned the goods or you simply cannot pay, please contact us in any case. Failing to respond now and simply ignoring our message is not a solution. At PAIR Finance, we find a suitable, individual solution for 97.8% of people that contact us.

I have received a text or WhatsApp message from PAIR Finance, can that be right?

We want to offer the easiest, quickest form of communication for all our customers. This means we will contact you by e-mail, text or WhatsApp if you entered these as contact options for your original order from the creditor. This makes communication easier and allows us to resolve the issue for you quickly and conveniently.

I have been contacted by PAIR Finance again even though I have already paid.

Depending on the payment message, it can take a couple of days after you make a payment before it lands in our account. If you receive messages from us several days after making a payment to us, the best thing is to give us a call or send us a message, quoting your reference number. If you have already made a payment to your contract partner, please e-mail us evidence of the payment (e.g. screenshot of transfer receipt). Please note that even if you pay immediately after our message, default costs have already been incurred and must therefore also be paid.

I don’t know what the debt is about, I didn’t order anything from them.

Please do not ignore our message. Send us an e-mail or call us to discuss the situation and avoid further reminders and costs. We will clarify things with the contract partner and, of course, will stop proceedings immediately if it transpires that our payment requests are not correct. If you are not familiar with the contract partner, the claim could still be correct, perhaps if you have used the services of a payment service provider when placing an order at a shop. This service provider, who made it possible to pay by invoice, for example, is your legal contract partner and payment is due to them. If, after more careful checks, it is still not clear why this claim exists and you have not received the goods or services to which it relates, please check whether your data could have been compromised. You can find out more on the website of the Federal Ministry for Information Technology Security. But it is important that you contact us whatever the situation, we can help you!
How can I pay?

How can I pay?

PAIR Finance provides you with the opportunity to pay the outstanding amount quickly and securely using a range of modern and simple payment options on your individual payment page. The link to your payment page can be found in all e-mails, texts and WhatsApp messages you receive from us. Alternatively, you can access your payment page by entering your reference number at payment.pairfinance.com. We offer payments by fast transfer (“Klama”), credit card (Mastercard and VISA), SEPA and many more.

How can I pay in cash?

Cash payment is a service offered by PAIR Finance in conjunction with an innovative payment provider, Cash Payment Solutions GmbH. This gives you the option of paying the outstanding debt anonymously and in cash in a partner branch of your choosing (e.g. DM, REWE, Penny, mobilcom-debitel). Simply enter the necessary information on our payment page and you be taken to a payment docket with a barcode, which you can use to make the payment at the branch of your choice. You can show the barcode on your mobile phone or take a printout to the counter.

I cannot pay the full amount at the moment.

If you are not currently able to pay the outstanding amount in full, you can visit your individual payment page from the link sent to you or via payment.pairfinance.com and choose an option that suits you (e.g. a payment break or an instalment plan). Alternatively, you can contact us by telephone or e-mail at any time. PAIR Finance finds a suitable individual solution in more than 97.8% of cases. Including for you!

Can I pay the contract partner/creditor directly?

You outstanding debt has been handed over to use from your contract partner for recovery, so we are now your direct point of contact for your debt. So it is very important that your payment is made to us in order to guarantee efficient, reliable processing of your case and close your file effectively.
How can I contact PAIR Finance?

How can I contact PAIR Finance?

You can contact us at any time by telephone, letter or e-mail, or also by text message or WhatsApp, making sure to quote your reference number. You will find our contact details in every e-mail and every letter we send. You can also click on the link in our messages to go directly to your personal payment page. Here, you can select either a quick, simple direct payment or a solution plan which is tailored to you. If you would like to settle your debt straight-away, you can also go directly to payment.pairfinance.com and enter your reference number in order to select a suitable solution.

I could not get through and would like someone to call me back.

We are happy to arrange for someone to call you back. One of our customer advisors will call you at the time you want.

Where do I find my reference number?

Your case reference number is included on every e-mail and letter from PAIR Finance. It is in the top right-hand corner of the e-mail or in the header of the letter. It is a 12-digit number starting with 10. It is very important that you quote your reference number so we can assign your case correctly. Please be careful to get your reference number correct if entering it manually.

I would like to leave feedback.

We are constantly working on improving our processes and finding the simplest, most user-friendly solutions for you. If you would like to leave us feedback, you are welcome to do so on this page. All feedback is gratefully received.

I am not happy with the service from PAIR Finance.

The satisfaction of our customers is very important to us. But we do understand that a debt collection process can be unpleasant news and there are situations in which not everybody is satisfied with the solution found. If you were not happy with our communications or the solution found, please submit your complaint here. We will, of course, look into your case again and get back to you.
What is the procedure for debt collection?

The debt collection procedure.

The company with which you have an outstanding debt has commissioned PAIR Finance with acting in its interests and agreeing a payment solution for the outstanding debt either out of court, through legal proceedings or following court proceedings. We make every effort to find a suitable payment solution with you without going to court. We also want to keep the costs of the process as low as possible for you. Even if you have any objections, please attempt to contact us by e-mail or telephone. This makes it possible for you and us to clarify any issues as quickly as possible before further costs, e.g. court expenses, are incurred.

The court collections process.

If, despite all our efforts, we are not able to reach an amicable solution out of court, the cases goes to the court collections process. This means that PAIR Finance applies to the competent collections court for the issue of a payment order against the debtor. This is then issued by the court by post. This generally incurs court costs of €32, plus additional costs for our administration work, which are set out in law. The debtor now has two weeks to object to the payment order. If the objection is made without proper reasons, the resulting legal dispute can considerably increases the subsequent costs. However, the debtor can pay the outstanding debt in full during these two weeks and bring the process to a conclusion. If neither a full payment nor an objection is received within two weeks, an enforcement order is issued in response to a further application. This forms the basis for legal enforcement.

The process after legal proceedings

The enforcement order allows the creditor to appoint the court officer, who will then obtain asset information about the debtor, in which the debtor must list all the assets they own and any incoming payments, such as wage or salary entitlements The court officer then gains access to wage and salary payments and any bank accounts held by the debtor, which can then be attached. The court officer can also seize non-fixed assets in order to settle the debt. If, at this point, there are insufficient assets to settle the outstanding amount, the creditor has a total of 30 years to apply for and execute further enforcement measures against the debtor’s assets. These additional measures by courts and court officers are associated with significant additional costs, which are all payable by the debtor. Don’t let it come to that.

Development of costs in the reminder and collections process

Late payments result in various costs to companies. In accordance with section 286, para. 1 BGB (German Civil Code), the creditor of the account has the right to compensation for the damages it incurs as a result of payment default. These include, for example, costs for involving specialist partners such as solicitors or debt collection companies. In Germany, the Legal Services Act governs the costs in situations like these. The Section 4 para. 5 of Introductory Act to the Legal Services Act (RDGEG) in combination with the Lawyer Remuneration Act sets out the maximum costs.
Even though PAIR Finance has optimised processes to ensure communication with the debtor is as efficient as possible in order to minimise costs, any delays taken in reaching agreement in the process can lead to rapidly increasing costs for the debtor.
What happens to my data?

Where did PAIR Finance get my data?

If we have contacted you, then we, as a debt collection company, have been charged by a company to work with you to find a solution to an outstanding debt you should originally have paid to this company following a purchase contract or service contract you concluded.

In order for us to send you a reminder of the outstanding debt and enable an amicable repayment, of course we need to be able to contact you. Therefore, our client can and must pass on your personal data, including your name and address, reason for and level of debt, etc., to us. Only with this data is it possible for use to approach you and assert the claim.

It can also be the case that we are acting with respect to a debt that is not owed by you, but by a third party, and we need to contact you in this context. This could be the case if you have been appointed as a carer or to act as a solicitor. In these cases, your contact data is saved as a correspondence address in the claim file and you also receive information on the processing of your personal data by a debt collection company in accordance with article. 13 or 14 GDPR.

What data is PAIR Finance authorised to process?

As a registered debt collection service provider, PAIR Finance can essentially process any data required to recover a debt. This requires regular data about the debtor, e.g. name, address and telephone number, and the debt to be collected, including the reason for the debt, amount and due date.

PAIR Finance can also obtain, save and use information itself where necessary for the processing of the relevant case. This includes, in particular, obtaining credit ratings, determining addresses and other data necessary for evaluating the debt.

Why is PAIR Finance processing my data without my consent?

All companies are free to call upon the services of a solicitor or debt collection company with respect to an outstanding debt, even if it is only presumed. If a debt is outstanding, even if it is disputed, a company can and must pass on personal data, especially your name and address and the reason, amount and due date for the debt, to PAIR Finance. After all, it is only with this data that it is possible for us to get in contact with you and find a solution to an outstanding debt. Consent is not required to pass data on to a legal service provider. Under data protection laws, PAIR Finance’s activities are authorised by the statutory circumstances set out in article 6, para. 1, clause 1, letters b and f GDPR (data processing for contract fulfilment, data processing based on the justified interests of the creditor).

Is PAIR Finance obliged to delete my data?

As what is known as a “Data Subject”, you have the right to deletion of your personal data in accordance with article 17, para. 1 GDPR, under the conditions specified therein. We at PAIR Finance take this right very seriously, as we do all other rights set out in the GDPR. We have developed blocking and deletion systems for all data we process.

The legislation also takes into consideration the fact that the other party will not always grant consent in cases relating to the assertion of outstanding claims. Therefore, the right to delete data does not apply if a company is processing your data for the assertion, exercise or defence of legal claims. This is in accordance with article 17, para. 3 letter e GDPR. Therefore, personal data can continue to be saved as long as claims are outstanding and being processed in line with debt collection activities. Once the debt collection process is complete, the data is no longer required to fulfil the debt collection process, and could essentially be deleted in accordance with art. 17, para., letter a GDPR.

Instead of being deleted, processing can be restricted if legal, statutory or contractual storage periods are contrary to deletion (art 17, para. 3, letter b GDPR in conjunction with section 35, para. 3, BDSG( Federal Data Protection Act). Of course, personal data may also need to be retained based on commercial or tax law provisions, but it is then retained only for this purpose. The periods can vary. The Contributions Ordinance (AO) and the German Commercial Code (HGB) specify deletion periods of up to 10 years.

I would like to object to the processing of my data!

The exertion of a right to object to processing of data based on the balance of interests (article 6, para. 1, letter f GDPR) in accordance with article 21, para. 1 GDPR requires you to cite specific reasons to PAIR Finance arising from your own particular situation. This means that you must demonstrate that there is an unusual situation and why this particular case lends particular weight to your interests. It is not sufficient, for example, to dispute the claim (“I did not conclude a contract”) or to assert that the creditor’s service was faulty or non-existent.

In accordance with article 21, para. 1 GDPR, the right to object also does not apply if the processing of the data serve the assertion, exercising or defence of legal claims. In the typical cases for debt collection processes (recovery of outstanding claims), your objection to our data processing is therefore likely to come to nothing. How else would it be possible to recover debts if the processing of the necessary information could be prevented. It is only logical.

Why has PAIR Finance carried out a credit search on me?

PAIR Finance is authorised to collect credit-worthiness data in accordance with article 6, para. 1, clause 1, letter f GDPR, if it has a justified interest in collecting data in this way. From our perspective, this interest is valid, for example, if a decision on the initiation of further measures is associated with a financial default risk, including in relation to the recovery costs incurred. Credit agencies can also provide current address data. Therefore, where applicable, PAIR Finance researches address data from credit agencies, as this information is a fraction of the costs of a resident registration search and this must be taken into consideration from the point of view of our obligation to minimise damages.

Will PAIR Finance report my case to credit agencies?


The reporting of unpaid debts to a credit agency such as Schufa Holding AG is authorised under the terms of article 31, para. 2 of the Federal Data Protection Act (BDSG). For example, it is allowed if you acknowledge the claim, an enforcement order is granted as part of court collection proceedings or if the prerequisites for termination of an ongoing contract without notice are met because of payment arrears. Another important reason for reporting claims to credit agencies is that at least two written reminders have been received about the debt, and at least four weeks have passed since the first reminder, you are warned that you will be reported to a credit agency and you accept that the debt is undisputed.

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