Figures show agencies recover nearly £6 million of debt every day
- New generation of consumers in debt for the first time
- Industry calls for access to the Full Electoral Register to counter data accuracy issue
Levels of debt being collected by members of the Credit Services Association (CSA) have returned to pre-Christmas levels, according to the latest Quarterly figures, as consumers look to regain control of their finances.
The gross monthly total of consumer debts collected for the final month in Q1 2012 (March) stands at £172.088 million – a return to a level last seen in November 2011 (£172.862mn) following a dramatic fall in December (£147.476mn).
CSA President, Sara de Tute, attributes this to an increase in placements in November contrasting starkly with the consumers hanging on to their money in December to spend on Christmas: “It is quite usual for the monies collected to decline over Christmas and the immediate aftermath as agencies show forbearance with the consumer’s position,” she says.
At the end of Q1 2012, the total value of unpaid consumer debt held by CSA members for collection stood at £58 billion (£58.316bn), comprising £31 billion (£31.264bn) placed by creditors with Debt Collection Agencies to collect, and a further £27 billion (£27.052bn) of purchased debt owned by Debt Buyers. This represents a slight increase on the total for Q4 2011 (£58.179bn – a difference of £137 million).
The total volume (i.e. number) of consumer debts awaiting collection by CSA members remains at a staggering 32 million (31,781mn) as at the end of March 2012, a slight fall on the previous Quarter (32,130mn). Debts are being outsourced for collection by ‘new’ creditors within the private sector and parts of national government – including the Department for Work and Pensions (DWP) and the HMRC – who no longer see an issue with recovering monies vital to the public purse.
The total value and volume of unpaid debts are high, Sara says, partly as new types of consumers fall into debt for the first time: “Our members are noting a trend of ‘new’ consumers falling into debt for the first time, and are working with them to agree a repayment schedule or reach a settlement wherever possible, and this is reflected in these latest figures.”
Yvonne MacDermid, Chief Executive of Money Advice Scotland, is not surprised that the CSA is seeing many different types of people in society, affected by debt arrears: “The recession is affecting everyone in one way or another,” she says.
“Many consumers have nothing left to cushion them from any emergencies which arise, and as a consequence they find themselves perhaps for the first time in arrears. The key to getting back on the road to recovery is to seek help from the money advice agencies, many of which offer advice for free, and, of course not to ignore the problem and to make contact with creditors or their agents.”