The phrase ‘Compliance’ covers many areas. It affects all parts of a business and how it operates, including not just the firm’s policies and strategy but also the way in which it communicates with each individual customer. Taking compliance seriously means having the governance arrangements in place to ensure a consistent approach throughout the entire business. Looking carefully at the regulations and guidelines that are relevant to the particular organisation’s activities is obviously important. Equally as important is ensuring that the practices conducted by the business are in accordance with the spirit of those regulations.
So far as debt collection agencies are concerned, the regulatory framework can be seen as a way of encouraging firms to treat customers fairly. It is fair to say that the financial services sector as a whole has been the subject of a considerable amount of negative press overage over recent years. The consumer credit niche has certainly not been immune to the cynical outlook shared not just by commentators and members of the public, but also policy makers. Calls for a revised regulatory framework have been strong in the aftermath of the 2008 downturn. It is important to remember however, that the development of best practice standards in the debt recovery industry has been an ongoing evolutionary process for some time.
Certain practices are no longer acceptable. These include inappropriately aggressive letters sent to individual customers. It also includes failure to validate contact data, leading to outside parties being contacted on numerous occasions. Certain companies within this niche have always rejected this type of approach and have adopted the type of practices that provide a very good example to other operators. One such company is the leading UK-based debt collections agency, Wescot. Rather than merely paying lip service to compliance and adherence to guidelines, this particular company has compliance at the heart of everything it does. It uses the latest technology to ensure compliance with all relevant data protection rules. Wescot also believes strongly in treating customers fairly. By engaging with individual customers on a meaningful level, it not only maximises the chances of recovery, but also of the business being able to rehabilitate and maintain its relationship with the individual customer. Rather than seeing compliance as a burden to be endured, it ought to be seen as a tool for increasing the prospects of success.
A model debt collection agency is one that has compliance at the heart of everything it does. For anyone looking for a debt collection solution from a reliable company, it is worth paying particularly close attention to Wescot. This leading UK debt collection agency is not only a leading member of the Credit Services Association, it has also been active in helping to shape and improve practice standards for the consumer credit industry as a whole.
By making actual and meaningful contact with a customer once he or she has been located, it provides far greater opportunity to deal with the arrears issue in an effective manner. Re-engagement makes it possible to treat customers fairly and work out a repayment plan that is acceptable to both the individual customer and to the organisation. It also opens up the possibility of rehabilitating the relationship between business and customer. From this perspective it can be seen that there is a place for basic data validation but at the same time, this should not be seen as a cheap and easy alternative to a product focused on delivering live customer contact.
For the credit services industry (and particularly those parts of the industry whose activities include tracing customers with whom organisations have lost contact), changes to the housing market over recent years have had significant implications. The high loan-to-value mortgages and interest-only deals that were common prior to the 2008 downturn have now either disappeared completely or have become an extreme rarity. This means greater numbers of people are living in short term rental arrangements or else are living with parents or other family members under informal arrangements for longer periods of time. For the consumer credit industry, this means it is often harder to differentiate genuine ‘goneaway’ scenarios from those situations where an individual is intentionally ignoring all attempts to make contact.
An integral part of collecting debts is the trace procedure, which is why companies like Wescot are able to find the customers and begin the collection process. Given that the company will only receive payment from a client once the collection has been made, it is important that the trace procedure is as efficient as possible. Customer’s residency is a common issue with tracing as residency is far more fluid and transitional than in years gone by. With the rise in people renting as opposed to getting a mortgage, customers are able to move around a lot quicker, which makes for a large number of mis-trace results if data sources are not cleansed regularly.
etition and the global economy are primary factors in how debt recovery is going to proceed in the future. Not only does the UK’s economy as a whole play a big part in the performance of a debt agency, but so too does the performance of that company’s competitors.
involved in the recovery process. The financial services sector has suffered from decreasing levels of consumer confidence in recent times due to the current financial climate and the banking crisis. In order to rebuild trusting relationships with consumers, the industry has attempted to improve how debt collection agencies contact individuals, how they communicate with them and also how they recover the debt itself.
Understanding what contributes to sustained economic growth is extremely important in relation to making the correct decisions to bring about such change. Immediately following the credit crunch, and with families throughout the country struggling financially, the Bank of England introduced extremely low interest ways in the hope of cushioning the blow of the tough financial times. The interest rates remained low for a substantial period of time which did indeed improve the financial situations of families throughout the United Kingdom. Following these cuts to interest rates in 2008 it was reported that families had more money to spend after they had paid household bills. Annual discretionary income trackers assess how much disposable income a family has after the deduction of the cost of living. These trackers had shown that following the drastic reduction in interest rates, a typical families disposable income increased from approximately £139 to £165. This increase lasted for roughly two years after the interest rates were lowered and brought a stability to the economy in the United Kingdom.
functions which are performed by a compliance department – identification, prevention, monitoring/detection, resolution and advisory. A compliance officer will initially identify any risks posed to a business or organisation, then create and implement systems and controls which protect against those identified risks. These controls are then constantly monitored and their effectiveness reported on. A compliance officer is on hand to resolve any difficulties with compliance as and when they arise and to offer advice to the business or organisation on rules and controls. Compliance is vital for complete customer confidence, helping to build up trust and improve client relationships through the consistent delivery of appropriate customer outcomes. Internal compliance systems are usually evolved through conversations with customers alongside adherence to external regulations.
Constant training and learning is also important to motivating a workforce. The more time that Wescot dedicates to improving the skills of their employees then they will feel more engaged with the company. This translates to a better, more efficient workforce and will contribute to the