For those individuals or organisations looking to outsource debt collection work, it is worth taking time to work out a list of priorities of what they want from a service provider. Value for money is likely to be top of the list (especially for those businesses that are still recovering from the effects of the economic downturn). Another item that ought to be high in any list of priorities is fair treatment of customers.
Those organisations unfamiliar with the workings of the debt collections niche may assume that fair treatment of customers is more to do with pure ethics and bears little or no relationship to achieving successful outcomes. In fact, as the leading UK debt collection agency Wescot demonstrates, fair treatment of customers tends to result in outcomes from which all parties benefit. This particular company has been at the forefront of best practice and has a proven track record when it comes to setting an example to other operators within this niche.
Use of technological solutions has an important part to play in this particular sector, as Wescot is well aware. Many companies use ‘smart data’ tools in which databases are cross-referenced as a method of tracing customer with whom organisations have lost contact. These can be useful but they can also have their limitations. One issue is that the majority of operators in this field use similar types of credit reference agency lead-generation data tools. The same information and data sources tend to be accessed on multiple occasions. If part of that information happens to be incorrect, multiple mis-traces can happen. It can be all too easy to assume the data is valid when in fact it is not. One of the unfortunate consequences of this can be that third parties are contacted in error on multiple occasions by multiple organisations.
Wescot knows that technology, when used in isolation or when put to use by inexperienced staff can have its limitations. When it comes to tracing customers, the company uses effective validation technologies coupled with experienced staff. Once a likely trace has been established, the company also recognises the value of re-establishing meaningful contact with that customer. This provides the opportunity for outstanding issues between organisations and their customers to be resolved in a manner that is appropriate to the circumstances of the customer.
Some organisations may be tempted to look for a ‘quick fix’ approach to tracing customers with whom they have lost contact. This is especially the case in the current economic climate where companies are keen to keep overheads to a minimum as they recover from the deepest recession for decades. A trend over recent years has been the development of ‘data cleansing’ solutions. These are often referred to as ‘light touch’ indicators of where an individual customer may currently be living. This approach is often coupled with treating all or the majority of gone-away debt scenarios as ‘trace and collect’. This type of approach might be appropriate in many situations. As Wescot is aware however, businesses may be missing out on valuable opportunities if they rely solely on this type of method. An organisation may find there are considerable advantages to making actual and meaningful contact once customers have been traced.
can be worked out. It means, for instance, that agents and customers are able to come up with repayment plans that are achievable in light of the customer’s individual circumstances. This is far preferable to imposing a plan on a customer with little or no thought as to whether that customer is going to be able to stick to it. The approach adopted by Wescot makes it much more likely that the arrears will be recovered. It also increases the likelihood that the relationship between the customer and the business in question can be rehabilitated.
agency’s attitude to compliance. One useful piece of advice is to identify those companies that have the processes in place to ensure the whole business operates in accordance with the spirit of the regulations – rather than attempting to do the bare minimum to stick to the rules.
Wescot points out that once a likely location has been identified for a previously gone-away customer, there is a lot to be said for attempting to make actual contact with that customer. Assuming of course, the agent involved in this is has the requisite skill-set, effective face-to-face re-engagement makes it much more likely that a solution to the outstanding issue will be worked out that meets the needs of the business in question and at the same time, is realistically achievable from the customer’s perspective. 
Before 2008, there was a much higher prevalence of interest-only and high loan-to-value mortgages. Over the last five years, these products have either disappeared completely or else have become much less common. This has implications for those companies who operate within the credit services industry and whose services include attempting to make contact with customers with whom businesses have lost contact. More individuals (especially would-be first time buyers and younger people) are more likely to be living in short-term rental arrangements. There is also a greater likelihood that customers are living with friends or family under informal arrangements. For those involved in the consumer credit industry, this can make it difficult to differentiate between the type of scenario where a customer has moved on and has merely forgotten to update his or her contact details and those situations where customers are actively trying to ignore attempts to re-establish contact.
red by customer-centric and other practices that have recently come into use in the debt recovery industry. There has been a greater focus on delivery of top-quality customer contacts, alongside investment in improved and ongoing processes of arrangement management. There has also been more of a focus on productive customer engagement and working on delivering repayment plans that are sustainable.
Goneaways have become more difficult to identify for debt collection agencies, complicating tracing methods utilised in order to access and interact with customers. It used to be the case that all goneaways could be identified quite easily and treated equally, but major changes in the industry and in housing have made this much more difficult. The industry is facing the challenge of ensuring that organisations avoid repeated, contact with third parties to whom the relevant accounts do not belong. Such incorrect contact has significant consumer impact and this is among the issues Wescot, along with other ethical debt collection agencies, wish to resolve.
Also of relevance is the fact that the way organisations interact with customers has changed dramatically over the last few years. In many b2c relationships, the vast majority of contact is online. If it is a longstanding relationship which suddenly turns into a non-contact scenario, the challenge faced by a business is to consider whether the last known physical address and telephone details for that customer are correct. In this climate, many businesses are likely to benefit from effective early arrears reconnection services. Not only can this approach maximise the chances of recovery, it can also increase the chances of rehabilitating the relationship between the customer and the organisation. Businesses are likely to benefit from approaching a company with a proven track record in customer tracing. Wescot for instance, employs a highly experienced locate team coupled with an effective validation process – both of which combine to help re-establish contact between customer and client.
By looking closely at the way this company operates, it is possible to see how it has managed to achieve considerable success against what may be regarded as a ‘difficult’ financial landscape. For one thing, the company aims to treat customers fairly and to engage with each customer in an effective manner. In this way, it is possible to open up a constructive dialogue and to come up with a realistic repayment plan. This is in marked contrast to the bad practices that previously earned the sector a bad name and which Wescot has always rejected. Such practices include poor tracing methods – including doing little or nothing to verify customer contact details to try and ensure they are as up to date as possible. Other examples of bad practice include aggressive letters, an excessive number of phone calls and uncontrolled doorstep visits.