Up!

The UK’s leading Debt Collection Agencies (DCAs) discuss the state of the industry

Sep 20, 2013

 

DCA Leaders Forum 2013 -  DCAs Need To Not Just Collect, But Communicate - Spring 2013 

The UK debt collection industry is growing fast. According to quarterly statistics from the Credit Services Association, the official body representing British debt collection service providers, consumer debt in the UK either passed to Debt Collection Agencies (DCAs) or sold to Debt Buyers officially passed the £60 billion figure in September 2012.

The government has started the process of moving the responsibility of enforcing consumer credit legislation from the Office of Fair Trading to the Financial Conduct Authority (FCA). The change of regime is going to impact all UK firms with a consumer credit license.

From April 2014, the FCA will be responsible for consumer credit licensing and supervision. The FCA have stated that the “new regime will be designed to focus resource on higher risk firms, such as pay day lenders, pawnbrokers, credit reference agencies and debt collection… The FCA is a very different organisation from the OFT and has a wider set of powers and more resources, so the experience for firms and other organisations will be different.”
 
Meanwhile, the longest recession since the 1950s means, according to the charity Credit Action, outstanding unsecured consumer credit lending stood at £157 billion at the end of December 2012. The average amount owed per UK adult (including mortgages) now stands at £28,944, just over the average median annual salary of £26,000.

This is the background against which a high level Forum was held in February 2013, bringing together the UK’s leading debt collection agencies to discuss the state of the market. This document outlines the key discussion topics around how are they finding working in the current national debt environment.

 The key discussion topics included, in an environment where regulation and compliance are becoming more extensive, how is the industry responding? Are there conflicting interpretations of such compliance rules by the partners that DCAs work with? How well do agencies feel that consumers understand the job that the collections industry does and how much do they understand their own finances?

Attendees saw the event as an opportunity to share best practice, but also to get their point of view heard. They were particularly keen to put forward the other side of the debt collection debate – a debate they feel too often paints the DCA as “the bad guy,” an unsympethetic ‘Goliath’ waging war in unfair battles with ‘Davids’ (consumers and small businesses).

The discussion also highlighted that agencies are struggling with an increased regulatory burden and need to get better at knowing and managing debtors, as well as communicating with them.

The overall message is clear. The British DCA industry is weathering a storm of bad perceptions and tough regulations, but nonetheless continuing to provide a unique and invaluable service.

Our recommendation: the industry could do better if it looked to improve some of its core processes via new technology.

 

Related news

Related Events

No related event