Industry Topic

From the results of its quarterly Data Gathering Initiative, The Credit Services Association recently released figures confirming that businesses are finding it increasingly difficult to collect their cash.

At the end of September 2012 the amount outsourced to third party debt collection agencies stood at £1.145bn, an increase of 12% on the previous quarter.Similarly, there was also a rise in both the amount and volume of consumer debt passed to Debt Collection Agencies or sold to Debt Buyers. As at the end of September the amount now stands at £62bn, a rise of 4%.  

These continue to be staggering figures and collection of these debts remains critical for the economy.  

 

Full details of The CSA Press release can be found here  

You asked us........

"Whilst London House is not a debt collection agency (DCA), what do you make of the recent figures released by The Credit Services Association?" 

Frankly, they are mind boggling! We are not a DCA but do of course become involved in tracing the debtors, interviewing them or indeed serving papers on them. The figures released by the CSA (based on member information submitted to them) show that agencies are currently recovering nearly £6m debt everyday. As at the end of March, the total value of unpaid consumer debt held by CSA members for collection was £58billion.

The total number of consumer debts awaiting collection stands at a staggering 32 million. The CSA members have reported a trend of new consumers falling into debt for the first time, with many consumers having nothing left to cushion them from any emergencies which may arise. It appears that the double dip recession has resulted in an increase in the number of debtors from more affluent households seeking financial help and advice.

You Asked Us

"The CSA has recently released, for the first time, details of the debt levels that have been passed to its members for collection. Any thoughts on the amounts?" 

They are big to say the least! At the end of 2011, the total value of unpaid consumer debt held by CSA members for collection stood at £58 billion (£58.179bn), comprising £31 billion (£31.239bn) placed by creditors with DCAs to collect, and a further £27 billion (£26.940bn) of purchased debt owned by Debt Buyers. 

The total volume (ie number) of consumer debts awaiting collection by CSA members now stands at a staggering 32 million (32,130mn) as at the end of December 2011 - the equivalent of at least one significant debt for every UK household or £1,000 of uncollected debt owed by every man, woman and child in the country. 

The figures show a rise on previous quarters, both in volume and amount, reflecting the economic climate. We are, of course, officially back in recession. In view of this, it remains to be seen how much of these figures can be collected. Full details can be found at the following link:

Unpaid debt figures