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In Focus Consumer Credit


Talking PAP


Will the new protocol provide advantages or prove to be a barrier for everyone?


Ijeoma Igbokwe Head of litigation, Hoist Finance UK Ijeoma.Igbokwe @robinson-way.com


The deadline has now passed, the talking is over and PAP – the Pre-Action Protocol – is now a reality. But will it succeed? The premise of PAP is an honest and


welcome one. It is intended to bring greater clarity to the litigation process, and support an ambition to avoid the cost (and disruption) of court action, and resolve debts amicably wherever possible. It endeavours to ensure that customers


have all of the information they need to make an informed decision, and create a dialogue between the creditor and their customer, even at the eleventh hour. To this end, PAP is replacing the ‘letter


before action’ (LBA) with a ‘letter of claim’ and it is very specific in its intentions and its requirements. Details of the claim, an information sheet,


a reply form, and an income-and-expenditure sheet all now have to be included, taking a short LBA to a 12-page bundled package. Customers now have 30 days in which to


respond, during which time they can request additional information.


Positive outcomes Viewed positively, PAP is an opportunity to engage with a customer when all other attempts at communication have failed, often over months and sometimes even years. It could lead to a debt being settled


amicably, without the need for costly court proceedings – a result that is in the best interests of both customer and creditor alike, as well as our over-burdened court system. PAP is not, however, without its challenges.


Response rates to existing LBAs are not especially encouraging, and some feel that, if a customer does not reply to a single-page letter, then are they any more likely to read a bundle of documentation and respond


22 www.CCRMagazine.co.uk PAP will affect creditors, collections


agencies, and debt purchasers in different ways, but all will be impacted one way or another, and the additional costs will have to be met. I think all of us will accept the additional


investment if the customer is better served, and the results are an improvement in the response rates upon the current LBA. We must hope that the complex nature


of the forms, and the sheer weight of information that the customer will now be presented with, does not actually act as a barrier to achieving a fair outcome for the customer. That would be contrary to all of our interests. CCR


December 2017


accordingly, or are we making a potentially confusing process more confusing still? We shall see. There are obvious difficulties with PAP,


not least that it will clearly be open to abuse by those customers who simply want to frustrate the court process by stalling for time and making spurious information requests.


From an industry perspective too, it will


undoubtedly add considerable cost to the collections process. What may appear, at face value, to be


a simple process change, will actually require significant investment and an increase in ongoing costs in paper and postage alone.


We must hope that the complex nature of the forms, and the sheer weight of information that the customer will now be presented with, does not actually act as a barrier to achieving a fair outcome for the customer. That would be contrary to all of our interests


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