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News & blogs: Blogs

Blog: The collections industry’s contribution to the UK economy

20 February 2019  
John Ricketts

John Ricketts is President of the Credit Services Association.


The Credit Services Association represents 300 members who make up 90% of the debt collection industry and who collect on 50 million debts at any one time…… that’s 50 million individual debts.

 

2018 was another good year for a growing collections industry with CSA members reporting £63bn of debt held for collection at the end of Q3, an increase of £5bn or 10% compared to Q3 2017. This record level of debt passed or sold to members by their clients and the £4.2bn that the industry collected in 2018 underpins our continued importance to the UK economy.

 

Indeed, this is an industry which is unrecognisable compared to when I joined the Board 10 years ago and as our membership has changed, consolidated, grown and matured into the broad-church of debt buyers and debt collection agencies, large and small that exists today, the CSA has in turn changed to meet those demands, and continues to change.

 

The scale and breadth of the collections industry’s contribution to the UK economy, however, doesn’t just stop at direct collections. Our debt buying members contributed at least £25.5m in voluntary “Fair Share” payments in 2018 to help fund free-to-customer debt advisers – namely, StepChange Debt Charity, PayPlan and Christians Against Poverty. This was an increase on the 2017 total of £23m which at the time represented almost half (46%) of the £50m the Money Advice Service (MAS) reported as contributed in total by the financial services sector. The contribution, which has risen from £15m in 2016, led the CSA in 2018 to not only question the current funding model, and the effectiveness and efficiency of a fragmented debt advice sector, but also to highlight how the industry is now one of the main funders of free debt advice in the UK.

 

A year doesn’t go by without the collections industry facing fresh challenges and 2019 looks set to continue that trend. With an uncertain economic outlook, the FCA increasingly looking towards our debt buyer members for direct levy funding of MAS, the introduction of the FCA’s Senior Managers & Certification Regime, the draft NPL EU Directive on Credit Servicers & Purchasers and the proposed implementation of a Statutory Debt Recovery Plan, the CSA’s relevance has never been greater and it is more important than ever that the industry stands together, with one voice, through a strong and progressive Trade Association.

 

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