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Debt Collection, Changing Perceptions

Jeremy Symes, Head of Debt Collection and Recovery at Bowden Jones Solicitors, gives his thoughts on eliminating the stigma associated with debt recovery specialists, advising on changes made to the industry and explaining the likely steps businesses need to consider.

The popular perception of forceful, aggressive collectors knocking on doors and threatening debtors with baseball bats is very much a thing of the past in the debt collection industry. Nowadays, debt recovery operates within strict industry-standard guidelines.

Collecting on indebtedness in 2017, means acting with the highest degrees of fairness and integrity. By using a considerate and professional approach helps negate preconceptions about the nature of collections, removing the negative connotations and allowing for an open discussion regarding the debt. This increases the likelihood of repayment while preserving the client-customer relationship, and is one of the key benefits of outsourcing to a law firm with a dedicated collections based department. These specialised debt recovery law firms are also using sophisticated investigative techniques to achieve the required results by customers repaying their debts and increasing cash flow.

How has the debt collection process changed?

The debt collection industry has adapted considerably over the last 25 years. Traditionally, the main source of recovering your money was through a debt collection agency which generically had a pretty poor image.  In addition, the industry was poorly regulated in the ways debt collection agencies went about their work.  This allowed for law firms with a pre legal or pre litigation debt collection department to become involved offering a two pronged strategy. A pre legal service which would negotiate settlements and monitor payment arrangements, escalating to legal action if the non-legal action failed. This collections approach from a law firm based presence offered a stronger delivery mechanism within the debt recovery sector and which is now very few and far between due to changes implemented by the Financial Conduct Authority in the way consumer debts are collected.

We live in an age where the majority of 18+ are involved in some type of debt repayment plan and being in debt is not considered a taboo as it once did.

Ultimately, the change in the industry centred on new technology. The revolution in technology changed everything and a new level of debt and debt collection services emerged. This enabled firms to dismiss strong arm tactics and replace with sophisticated systems and controlled procedures.

Technology developed and took over the industry.  New bespoke case management and collection systems, predictive dialers, email, texting, behavioural scoring, all enhanced the collection routines to improve efficiency. That said, the primary focus remains recouping debts.  The advances in technology allows us do this in a much effective way whether to recover a few accounts or a large volume of accounts.

 What is the process for a debt collection agency in 2017?

  • The first step at pre-action stage should be to plan a strategy with the client utilising either pre-legal or legal action or a combination of both, which will entail a mixture of letters and telephone calls. Followed by:
  • Validate customer information supplied from the client.       To include:
  • Home address,
  • Employment details (including occupation)
  • Obtain all contact numbers. Including current home, mobile and work telephone numbers – check they are all active and correct.
  • An email address will also need to be obtained as this tends to be a preferred method of contact.
  • If further action is required following a prescribed process, the first step we will be to identify any assets and research lifestyle to quantify indebtedness, filtering cases for appropriate civil or insolvency action for maximum impact.

Should you require further assistance in relation to recovering debts then please visit www.bowdenjones.co.uk to make an enquiry. Alternatively, contact Jeremy Symes, our Head of Collections and Recoveries, by calling 02920 484550.