With a return to face-to-face networking, it was a pleasure to join this year’s Credit Connect Think Tank event on the 4th November in Manchester, signalling we have reached a good moment to take stock of the lessons learned during the pandemic and how the collections landscape may develop in 2022.
At the Credit Services Association (CSA), we continue to believe that early engagement between customers and their creditors & collections agencies remains at the heart of successful debt resolution. We still see too many uninformed news stories, and even commentaries from policy-makers, implying that contact from a collections agency is in itself somehow a “negative consequence”. If members of the public are deterred from conversations about their situation because of myths and misplaced anxieties, then the potential forbearance and signposting towards help available may be missed. So more work is needed to destigmatise dialogue about indebtedness.
The Covid pandemic has not derailed the focus of firms on raising standards, improving services for the vulnerable and investing in skills and professionalism. Perhaps one unexpected development has been the recruitment challenge for our sector as with others across the economy. There are creative steps forward being deployed by a number of companies, including making full use of their apprenticeship levy to draw down investment in skills and career development.
At the Think Tank event we covered several of the key ‘talking point’ issues for our sector. How will regulators handle the many utility firm customers whose energy suppliers have fallen into administration and who may have accounts in deficit? Will the FCA’s changes to authorisation permissions have unintended consequences for framework panels used by creditors to outsource collections? How will the new regulation of buy-now-pay-later impact consumers and repayments?
Regulators looked to our sector during the pandemic to provide payment deferrals and additional forbearance and the sector did just that; it is why the ‘Breathing Space’ initiative has been so readily deliverable, because most firms already offered even greater debt respite. It is to be hoped that regulators will continue to acknowledge the willingness of collections agencies and debt purchasers to offer such support to customers, even in the face of a squeeze on available resources because of rapidly escalating costs of administrative compliance.
The FCA’s consultation on a new ‘consumer duty’ is definitely one to watch, with many questions still to be answered about what ‘gaps’ in existing rules the regulators believe this proposal will address in practice. And there are new challenges to be tackled, again to ensure that there are fewer impediments between customers and the engagement and support towards debt resolution that they may need. That’s why it’s worth looking closely at existing practices on identity & verification (ID&V) to allay concerns about fraudulent calls without jeopardising important conversations from occurring.
The CSA will be focusing on these and many other issues in the weeks to come. But at least in the meantime we now have greater scope to meet in-person, discuss the agenda for our sector face-to-face and share solutions to ensure a healthy and well-functioning credit cycle can benefit our communities in 2022 and beyond.