In Focus Collections
Left-right: Dewi Fox; Jayne Ireton; Katherine Bailey; Matt Baker >>
then you cannot subsequently say ‘you did not do this’. So when we use a
DCA, we will tell them: ‘we have done up to here, so we cannot drop the standard, it needs to go higher than that’. You need to give a nice clear mandate, instruction, and direction. The important bit is to be clear on whether you intend that there should be a business partnership at the end of this or not. If there is not, then they have full mandate, but the communication over the boundaries is crucial. There is a big difference between consumer and commercial debt: in the commercial world, an unpaid debt is a breach of contract and is treated as such. On the consumer side, there are other considerations.
DS: I think that it is interesting that debt collectors do get this brand image of the intimidating doorstep visit by the ‘heavies’, adopting unscrupulous behavior to recover illegitimate sums. The Credit Services Association has worked hard to engage and update the public and industry stakeholders on the professional, and totally legitimate, conduct and behaviors of its members, a very different reality from the world of ‘baseball bats’ and the heavies turning up on the doorstep. In terms of the standards that creditors expect, we spend a lot of time and energy in ensuring our agents are able to accurately assess and deal with a range of customer situations. The job has moved away from simply collecting outstanding balances to a role very much focused on achieving fair customer outcomes and accurately assessing a customer’s situation and tailoring remedies to suit that situation.
DF: As collection agencies, potentially we are regulated businesses as well – at ARC we are, as we collect regulated debts. We
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have to do things correctly because we have to comply by exactly the same rules as the major creditors.
KB: I have ‘three hats’ in this regard: the hospitality side, leisure side, and clubs. So we have all different kinds of debts and I also sit as a magistrate, so I see the utilities coming in for warrants to disconnect or change the meters; so I see all sides. What my company needs from a DCA is actually quite simple: transparent costs. That is an issue for us because I know all the DCAs are very professional and well regulated, and have to follow the proper procedures, so that is almost – although not entirely – taken as read. What I want to know is, if I am sending a small debt, how much of it am I going to get back, and how long is it going to take? If we are going through quite a complex legal challenge, again, how long is it going to take, how is it going to be dealt with? What I want is an agency that will take on our debt, which we have already chased ourselves, and who will be very efficient within that pre-legal stage.
SW: I suppose the challenge is, particularly if you are asking to go down the legal route, once you take that through the courts and beyond the remit of the FCA, how do you define that reputational risk. How is my
debt collection going to react with the customer who is under stress, but the judgment has been awarded and so the money is due? We have seen some very interesting initiatives like DCAs having a partnership with The Samaritans, and, of course, they want their money, but reputational risk is always important.
AL: In terms of whether the growing visibility of the collections industry has affected people’s willingness to pay, I think it very much depends on whether they are a ‘can’t’ or a ‘wont’ pay debtor. With someone in the ‘can’t pay’ category, their perception of the industry does not make any difference, it is more about finding out about their vulnerability needs and how we can help them. For those in the ‘won’t pay’ category, it may make a difference.
KB: I do think that the increased visibility of the industry does make a difference. If you have a good collections or enforcement agency, then they will follow all the proper procedures, keeping an eye on the customer to be sure that they are treated fairly.
DS: I am not so sure that it makes a difference – it clearly makes good TV, but, ultimately, who wants a bailiff on their doorstep?
We spend a lot of time and energy in ensuring our agents are able to accurately assess and deal with a range of customer situations
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What are creditors’ experiences and preferences when it comes to DCA performance and remuneration? NA:We do, of course, have policies for vulnerable customers and how we can support them during times of stress. However, we also have a policy whereby we do not write off debt at all – except for in the most extenuating circumstances. We
November 2017
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