In Focus Collections


Selected conclusions from the Blue Discussion Group


there was a strong view that, once you have that contact you are half way to winning. It is getting the contact in the first place that is the real challenge. l Creditors need to be more mindful of engaging with their customers earlier. So they need to talk about the collections process up-front: ‘if you do not pay, this is what will happen and this is how we deal with it’, rather than just waiting until it happens and leaving consumers to be frightened by it. The education needs to be at the point of


l Our reaction to the statistics was that they were driven by a variety of factors, including consumer behaviour, changes to the landscape, and the trend in insolvencies must have been effected by the online-petition process, but it is difficult to understand what that really means. l Incomes are being stretched and interest- rate rises will make this much worse when they happen. l One of the consequences of the decreased availability of consolidation loans is that credit cards are being used more and increasingly to pay utility bills and standard- of-living expenses, rather than for luxuries. Interestingly, a recent FCA report found that people are in more debt now, but are less worried about it, which was an interesting an perceptive take. lWe considered that a greater focus on stress-testing and affordability in lending meant that there was more better quality debt to be collected. l A few members of the group considered that an outcomes-based approach actually gave better returns, and collections agencies are getting more from a smaller pot because they are doing a better job. So a new world of an outcomes-based, rather than results- driven, approach is beneficial.


January 2017


lWe agreed that advice is generally working better than it used to and the better prioritisation of debts means that priority debts are being identified better so there is less unsecured debt causing problems and because the debtors are being able to keep their houses. l The conduct activity is a driver of change. We are seeing that repayment periods might be longer, but they are sustainable and that means that they are more effective. lWhat can we do better? There was a lot of discussion about a single point of entry so that people could do an income-and- expenditure statement once, rather than repeatedly. The idea was put forward to save all the information to a template that could be shared, rather than having to keep on re-keying everything. l Breaking down the perception to deal with a creditor, a collector, or an advice agency is going to be a bad experience, is really important. And we thought that there was a lack of


awareness that these conversations would actually be helpful and actually lead to a positive outcome. So we need to improve trust and


awareness to improve the level of contact – www.CCRMagazine.co.uk 35


take up. You can try to educate consumers about a range of things – and there is a wide range of education available – but people will only listen when it is relevant to what they are doing. lWe need to change the mind-set about the credit products used. Very often a credit card that might be the right solution for six months is not the right answer for 25 years, but that is happening in too many cases. We need to increase the visibility of the


impact of taking 25 years to pay a credit card back. It is an important statement that we need


to make people see that making the minimum payment is not the best solution. The mortgage sector does that very well by flagging up the total cost of credit, but maybe other sectors need to look at it.


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And we thought that there was a lack of awareness that these conversations would actually be helpful and actually lead to a positive outcome


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