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In Focus Consumer Credit

Collections and litigation all under one roof

Having ABS status as a DCA means that there is no longer the need to have to outsource legal work to a third-party law firm as all litigation can be conducted in-house

Andrew Newsome Managing director, Legal Recoveries & Collections andrewnewsome@

Last month, we were proud to announce that we had achieved Alternative Business Structure (ABS) status. The concept of an ABS was introduced by the Legal Services Act 2007, however the Solicitors Regulation Authority did not start accepting applications until January 2012, so the concept of an ABS is still fresh within the marketplace. An ABS is an entity that allows both

lawyers and non-lawyers to share the management and control of a business. As an ABS, we will be authorised and regulated the same way as a firm of solicitors. Like other debt collection agencies offering

litigation, for the last 13 years we have partnered with a third-party law firm who conducted the litigation. Achievement of ABS status means that we will be able to offer a full collections and recoveries service all under one roof without the need, any more, to have to outsource to a third-party law firm. Experts had predicted that traditional

debt collection agencies would struggle to achieve ABS status, but I believe that it is testament to our years of experience in the debt recovery industry and key individuals’ legal and industry background, that this goal has been achieved. The industry, as a whole, has undertaken

tremendous change recently, not least down to a change in the regulatory body – with the Financial Conduct Authority replacing the Office of Fair Trading – an increased focus on compliance and the emergence of key players within the debt sale and purchase markets.

22 Notwithstanding increases by the courts

in terms of issue fees, litigation is again becoming a popular and valuable tool in a creditor’s armoury for recovery of debts. With correct customer intelligence, segmentation and scorecarding applied to accounts, recoveries through litigation often far outweigh a pre-legal contingent-only strategy. In addition, with the bankruptcy threshold

set to increase significantly from 1 October, creditors will no longer be able to rely on statutory demands and then bankruptcy proceedings for recovering debts between £750 and £5,000. As a result of this change, creditors will only have the option of the county court route for recoveries. We very much believe that we are able to

go from strength to strength as a result of the achievement of ABS status and, as a debt collection agency, we believe we have found a niche offering within the marketplace as a collections agency offering litigation as a core service, not at traditional law firm prices. CCR October 2015

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