CCR2 Public sector debt


The difficulty with financial difficulty


The key to success in dealing fairly with distressed cases may include improved use of data, as well as some fresh thinking


Sue Chapple Strategic account director, Indesser Sue.Chapple@indesser.com


When it comes to recovery of debt, a ‘one size fits all’ approach to those who are vulnerable can risk customer detriment and generate negative returns, where the cash collected does not even cover the cost of the collection activity. Truly, this approach benefits no one so, how do you drive improvement on these cases? When you get the treatment paths right,


with fair and appropriate activity tailored to customer needs, then you are much more likely to get a better customer outcome and improved net return. That is not to underplay quite how hard it is to do this but, nevertheless, it is well


When you get the treatment paths right, with fair and appropriate activity tailored to customer needs, then you are much more likely to get a better customer outcome and improved net return


Figure 1: Percentage in financial difficulty when reviewed against key indicators of financial difficulty


worth the effort of investing more in this area, as 20% to 30% (see Figure 1) of a typical portfolio of accounts in arrears will fit the criteria of financially vulnerable; clearly a big, and important, enough group to require a tailored approach and one which can generate significant learnings for future benefit to all.


Data sharing One of the things you can do is to improve access to, and use of, external data sources, as well as sharing internal data to look for financial indicators of distress. Some examples of this include identifying


where a customer has lots of other accounts in default, unsatisfied CCJs or a track-record of receiving debt-collection activity.


Figure 2: Engagement comparison, financial difficulties path vs control


Source: Analysis of TDX Group managed Recoveries Management portfolios 22


Source: Financial Difficulties trial conducted by TDX Group www.CCRMagazine.co.uk September 2017


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