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The Analysis News & Opinions OFWAT: new debt guidelines


Debt collection agencies, which are not regulated by the Financial Conduct Authority (FCA) will continue to be allowed to work water debt, under a new agreement with the industry’s regulator. Following recent calls for change from the


Credit Services Association (CSA), OFWAT, the water industry regulator, has been working with Orbit Collections Group to amend its current guidelines that could have obliged water companies to only use agencies that are regulated by the FCA. In the existing guidelines, OFWAT


“expects” its members to only engage with reputable agencies “licensed by the FCA to engage in debt collection and who abide by industry codes of practice such as that of the CSA”. This would currently preclude a water company from working with a ‘non- regulated’ collections agency, although senior industry professionals argue that this label is inaccurate.


The specialist collection agencies working


in the ‘non-regulated’ sector do not fall within the FCA remit, which is reserved for those involved in the collection of debt relating to the Consumer Credit Act. Speaking at last month’s UK Credit and


Collections Conference, run by the CSA, Orbit Collections Group warned that other agencies may find themselves in a similar position if they did not address the current anomaly with their peers. A spokesman for OFWAT said: “We have


concluded that it would not be in the interest of customers to prevent debt collection agents who specialise in water debt from providing


a service to the sector. We are confident our update will ensure those companies that specialise in unregulated debt can continue to serve the sector.”


Opinion


We welcome this common-sense approach by OFWAT, recognising the need for FCA standards of customer treatment, while understanding the important role which can be played by agencies who cannot be FCA regulated. The ultimate goal must remain that we


treat every customer the same, whether dealing with a water, telcoms, or banking debt, and we welcome OFWAT’s contribution in this regard.


Leigh Berkley President, The Credit Services Association


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