Intrum Justitia Welcomes Vote on Revised Late Payment Directive

STOCKHOLM, Sweden–Intrum Justitia welcomes European Parliament vote on revised Late Payments Directive but regrets that late payment by consumers has not been addressed.

On 20 October, the European Parliament adopted a series of amendments to the EU Late Payments Directive.

Intrum Justitia, Europe’s leading Credit Management Services Company, has played an instrumental role in highlighting the gravity of late payments to EU decision makers, the media and the wider public. Intrum Justitia’s European Payment Index report has been widely used as a reference in the debate.

“Intrum Justitias mission is to be a catalyst of a sound economy. By that we mean that we should take an active role in ensuring that businesses across Europe can pursue fair and safe trades, and that sustainable credit management can help improve cash-flows. In line with this it is a vital part of our business to influence the legislators in EU, says Lars Wollung, President and CEO of Intrum Justitia.

“We welcome the revision of the Directive and the efforts to allow companies to get compensated when their clients fail to pay on time, as late payments are both costly and increase the financial risk. We also see a need to address late payments by consumers as late or no payments by other businesses and by consumers are equally harmful to businesses,” says Lars Wollung.

In the 2010 European Payment Index nearly 60% of all respondents called for national and pan-European legislation on late payments by consumers – such a move would make a significant change and in some cases help to save businesses.

Key points of the text as voted by the European Parliament:

For public-to-business payments, the standard deadline for bill payments is set at 30 days. However, the sides may expressly agree to extend the deadline for up to 60 days.

• For business-to-business payments, the deadline is set at 30 days unless specified otherwise in the contract.

• Member States are free to decide to set up a standard deadline for up to 60 days for public healthcare facilities.

• A statutory interest rate on overdue payments of the reference rate plus at least 8%.

• The creditor is entitled to a fixed sum of €40 (minimum) as a compensation for recovery costs.

“The revised Directive is a step in the right direction, and Intrum Justitia will continue working with decision makers so that the regulation of late payments by consumers as well as by businesses becomes even stronger in the future,” Lars Wollung concludes.

Intrum Justitia is Europe’s leading Credit Management Services (CMS) group and offers services designed to measurably improve clients’ cash flows and long-term profitability. Intrum Justitia was founded in 1923, has around 3,400 employees in 22 countries and revenues of approximately SEK 4.1 billion in 2009. Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002. For further information, please visit www.intrum.com