Collecting your Debts
Despite the major steps taken by the Collections industry to promote its services over the last few years, both in the private and the public sector, there is still a mindset amongst some businessmen and women that using a third-party Debt Collection Agency (DCA) is acknowledging a failure on their part to recover monies owed. They worry that employing a third-party will somehow mean they will lose control of their customer and their reputation. And they worry also that the cost of recovery might be too high. It is a mindset that has to change, because nothing could be further from the truth.
When considering the use of a Debt Collection Agency, first make sure that they are members of the Credit Services Association. Then you can be sure that you will remain in control, and not put your reputation at risk. Members of the CSA adhere to a strict Code of Conduct. There are specific procedures and rules that these members follow with teams dedicated to a specific task – and that is recovering debt.
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Collecting your Debts
Education Sector
Student debt are two words that sit together as comfortably as ‘foregone’ and ‘conclusion’. But aside from the often hysterical coverage meted out on the subject, many credit managers within the tertiary education sector are well advanced in their dealings with the problem, and in working with external collections agencies to maximise the return of monies that would otherwise be lost in the system.
Debts incurred by students, or at least those that concern the universities or colleges to which they belong, tend to focus around two main areas: accommodation fees, and tuition fees. To these are then added what might be termed ‘sundry debts’, for example payment for field trips, library fines etc. The potential for debt is considerable; even if only a small percentage of tuition fees, for example, is not recovered, it can amount to several millions of pounds ‘lost’ to that university.
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Education Sector
Government Sector
It has been an extremely busy period for the Credit Services Association over the past few months as it looks to accelerate the momentum around its debt manifesto.
The manifesto, as was exclusively revealed in Credit Today last year, sets out our proposals to address the problems caused by excessive personal and commercial debt. The major change we are looking for is a requirement in law that would oblige borrowers to notify their creditors in the event that they move addresses. We estimate that in 2006 around three million address traces had to be carried out to ‘find’ people who had moved house or premises without informing organisations to whom they owed money.
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Government
Public Sector
All around there are media reports about the mounting debt crisis, a crisis giving greater impetus still by talk of the credit crunch and impending doom on the High Street. The malaise is also hitting businesses hard, and making an already precarious position more difficult still.
The fact there is a crisis is not in doubt. Six months ago the CSA concluded a comprehensive survey of business activity, trends and data supplied by its 300 members to ascertain the size and volume of the collections market. The results were staggering. The amount of debt passed to debt collection agencies for recovery has more than trebled in the last six years to £21 billion. The number of cases has also risen; CSA members now handle more than 20 million cases, up from 17 million cases two years ago. Nearly one million (885,063) of those cases involved tracing, highlighting the increasing problem of ‘gone-aways’.
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Public Sector
Trace and Investigation
Tracing is on the increase, and dramatically so. Figures published by the Credit Services Association in 2007 showed that of the 21 million cases undertaken by its members that year, close to one million involved a ‘trace’, and the real figure is likely to have been much higher still.
The sheer volume of traces used in collection highlights the mounting problem of ‘gone-aways’, and it was for this reason that the CSA recently met with the Information Commissioners Office (ICO) to discuss how the industry should address the issue of validating data from credit reference agencies in relation to those debtors who have either unknowingly or deliberately ‘disappeared’.
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Trace and Investigation
FSB issues red reminder to Taxman
The Federation of Small Businesses (FSB) has called for Her Majesty’s Revenue & Customs (HMRC) to issue much-needed cheques on time to around 130,000 small businesses. The call follows news that HMRC has admitted it could take until December to issue the cheques. The payments of £150 are incentives for filing annual PAYE returns online.
The scheme, introduced in 2004, was meant to encourage small businesses to file PAYE online and will become compulsory in 2010.
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FSB Article
UK BUSINESS TAX IN NEED OF RADICAL OVERHAUL – SAYS CBI TAX TASK FORCE
International tax competitiveness must be restored
Article reprinted with permission from CBI: www.cbi.org.uk
A radical overhaul of the UK's corporate tax system is needed urgently if the country is to regain its status as an internationally competitive location, a new report argues.
Its report, 'UK business tax: a compelling case for change', reveals that the UK has now reached a tipping point. The ever rising business tax burden and the failure of the tax system to respond to increasingly global business activity is creating a corporate tax system which is unsustainable in the long-term.
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UK Business Article
CSA Launches Debt Manifesto
The Credit Services Association (CSA) - the official body representing the UK debt collection industry - is launching a Manifesto calling for a radical review of legislation and regulation that concentrates too much on the rights of the consumer, and not enough on their duties to fulfil their financial obligations.
It is also challenging the government to tackle the issue of ‘information sharing’ - the biggest problem impacting the recovery of debt being the lack of rightful access to information about debtors who have wilfully absconded or disappeared so as to evade their debt obligations.
Specifically it believes there should be a legal requirement for individuals to register an address with their creditors, and inform creditors if they move. This would, practically overnight, protect the innocent from the incidences of ‘mistraces’ that have been allowed to overshadow the real issue of certain debtors committing deliberate fraud or evasion.
To download your copy of the Manifesto, click here.
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Manifesto
Consultations now Available!
Do you have questions you cant find the answers to?
The CSA has the answers. . . .
The Credit Services Association is committed to providing the answers to those industry questions that you are unable to find the answers to. For these reasons consultations with our Executive Director, Kurt Obermaier, are available to help provide those answers and a clearer understanding of the debt servicing arena.
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