In Focus Collections


Allowing consumers to move forward to a brighter future


Last month CCRMagazine and Arrow Global Group brought together a day of discussion, highlighted by a selection of keynote presentations and debate amongst three groups – the Red, Green, and Blue Groups – into new ways to encourage debtors to start to improve their circumstances; and to reward them when they do. This discussion was based on Debt Britain, a new piece of research, produced by Arrow, which seeks to consider both the financial situation as it is, and to suggest a ‘traffic-light system’ which could be used to encourage troubled consumers to continue on the path of a repayment plan


Tom Drury Chief executive officer, Arrow Global Group


Debt is a crucial factor in today’s society. On the one hand, it plays a vital role as a turbo-charger of the economy. However, on the other hand, for a variety of reasons, a proportion of consumers will always fall behind on their repayments.


A comprehensive overview We brought the Debt Britain report together to explore these varied reasons and to give a comprehensive overview of the state of personal indebtedness as it stands in the UK today, as well as the state of the consumer-debt industry. There are some really interesting findings


beyond those up for discussion at the debate, such as the attitude of young people to debt, the impact of debt on people’s mental well- being, and, overall, a broad set of findings that came together well.


Debt and the macro-economy We also took a look at the impact of debt on the macro-economy because, although there is a lot of research on the impact of factors such as mortgages, we could not find anything that made any predictions of where unsecured debt is heading. In addition, there is very little publicly


available data, in our experience, from creditors across-industry about the situtation of unsecured debt. So we were able to put together an estimation of what might happen to


January 2017 unsecured debt default going forward. And


this was that over the next three years, the level of default will rise significantly.


A desire to do more We wanted to do more than just research, instead we wanted to bring some ideas to the industry. So we thought about what we would be


able to do and what improvements could be made to create a more effective system for customers wanting to manage their way through this difficult situation that they found themselves in. And, in particular, we wanted to consider


the ways in which we might be able to give some encouragement to the overwhelming majority of customers who are seeking to repay their debts as quickly as they can afford to do so.


We wanted to consider the ways in which we might be able to give some encouragement to the overwhelming majority of customers who are seeking to repay their debts as quickly as they can afford to do so


www.CCRMagazine.co.uk


A traffic-light system We decided to put the idea out that maybe the credit reference agencies – because they clearly play a pivotal role in this – might be able to introduce something like a traffic-light system as a helpful way of providing the right incentives to customers, as well as useful and interesting information to creditors. We are not saying that this is the finished


answer, rather it is something that we are putting out there to open the discussion.


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