The Financial Supervisory Authority (FSA) of Denmark has launched a probe against Danske Bank over irregularities in debt collection system.

FSA believes that the lender may have misled the financial watchdog about handling of debt collection errors.

The bank first informed FSA about the errors in its debt collection system last year and promised to fix the errors and compensate its customers.

In a statement, FSA said: “Based on that information, the FSA was under the impression that the bank had acted when the bank became aware of the situation.”

The bank, which is already being investigated for a $230bn Estonian dirty money scandal, is being accused of wrongly collected debt from up to 106,000 customers since 2004.

The probe was launched after it was found that nearly 15,000 customers repaid extra debt over many years.

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The bank said that it is currently reviewing 100,000 accounts to repair the damage.

Apologizing for the errors, Danske Bank spokesman Stefan Singh said customers “should of course count on the calculations we make, and we regret that this has not been the case in this instance.”

FSA has given Danske Bank until 10 September 2020 to answer several questions related to the latest scandal.

Danske Bank will have to answer questions including when the lender found out there was an issue with the debt collection system.

SOIK, an economic crime squad in Denmark, said that it is currently in talks with the FSA regarding Danske Bank’s case.

On the other hand, Danish government intends to involve the parliament into the matter.

Moreover, in February, the lender said it had kept aside $64m in provision for losses related “to a data quality issue that affects a limited part of our operations.”

The bank added that it was still looking at the problem “to determine the exact extent of the issue.”