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The Credit Services Association (CSA)
Blog: The debt collection sector’s five most important developments of 2015
Peter Wallwork is CEO of the Credit Services Association.
2015 has been a year of significant progress and achievement for our industry and much has been achieved in a landscape for debt collection that has changed irrevocably.
Our new-styled annual event - the UK Credit and Collections Conference (UKCCC) - provided a forum for serious debate about the key issues and challenges that have dominated the year and will continue to exercise our minds and judgment in the months ahead. To sum up 2015, we have identified the five key developments that will shape debt collection practices in 2016 and beyond.
- Reducing stress and hassle for customers
As an industry, we have been looking at practical ways to improve the customer journey this year, with a CSA Working Party dedicated to exploring the Income and Expenditure debate and the opportunity for a one-stop portal to reduce the amount of time that customers spend sharing financial circumstances over the phone.
As the debt collection sector’s UK trade body, we’ve also been a proactive thought leader on issues around working with vulnerable customers in 2015. The debate and challenges around dealing with the most vulnerable in our society has significantly moved on this year, with an acceptance that vulnerability is not something that can easily be defined or measured via a ‘tick box’ exercise. It requires in-depth customer engagement and understanding. In addition to introducing members to the British Standard on Inclusive Service Provision, and sharing the FCA’s Paper No 8 on Consumer Vulnerability, we also made the issue a key theme of our conference and member communications throughout the year.
- Raising the bar for industry best practice
Our work with industry regulator the Financial Conduct Authority (FCA) is ongoing and the announcement that debt collection and debt purchase will not directly feature in the FCA Thematic Review, and therefore is not seen as an area of risk, was very welcome. This has prompted a further review of our Code of Practice and a specific Working Party has been established to look at a new Trace Code of Conduct and Principles of Trace. We also have a Working Party dedicated to the development of Best Practice Guidance on the withdrawal of paying portfolios, and recently launched a Model Contract as a benchmark of good practice in drafting contracts in the new regulatory environment.
- Dispelling myths around debt collection
We are particularly excited about two key pieces of work we are doing collaboratively with the FCA on Affordability and Due Diligence. Both will help us dispel some of the myths which are associated with our sector, provide guidance and clarification where needed and answer questions on some of the grey areas of interpretation. This is an important role for us to play in improving customer and stakeholder engagement for the benefit of all.
- Ensuring compliance is not at odds with achieving the best customer outcome
We have lobbied for a rethink of two big proposed regulatory challenges this year, after identifying that they would not only adversely affect the way our members do business but also adversely affect customers.
Although there are still areas of concern around the new EU Data Protection Regulation, there is no doubt that the CSA and its partners in Europe have caused the bureaucrats to pause and rethink, and the ultimate outcome will be better informed as a result. We have also ensured that our members have been briefed throughout, and our communications and lobbying recognised with a prestigious industry award.
We also worked with the water industry regulator to rethink its decision to only use FCA regulated debt collection agencies. We highlighted that our ‘unregulated’ members that specialise in the water industry like Orbit Collections, (who are exempt from FCA authorisation because they are not financial services focused), are actually much better placed to work with customers and adhere to the same standards, despite not being obliged to comply. This helped to clear up an otherwise confused picture that could have been detrimental to many customers.
- Bringing the industry up to speed with the latest standards
Education, knowledge and development has been another key theme of 2015. We continue to offer up-to-the-minute blended learning and development solutions through our Level 2 & Level 3 Diplomas in Debt Collection, a Level 5 Diploma in Compliance Risk Management and also our Collector Accreditation Initiative (CAI) that has recently passed a significant milestone. The number of tests taken has now exceeded 20,000, with more than 80% of participants achieving a pass. Some 90 companies are taking part in the scheme, comprising 5,500 employees across the whole sector including the banks.
Next year will see our efforts concentrated on developing more online options and funding opportunities to members and the development of further learning career pathways. All of this helps to ensure not only that industry standards are high but that debt collection practice is as current and relevant for the customer as possible.
We are already looking ahead to next year to ensure that whatever the challenges 2016 has in store for our industry, the CSA will be at the heart of the debate.