Credit Management Jan:Feb 2019

OPINION
AUTHOR – SEAN FEAST FCICM
Peter Wallwork MCICM
Steve Murray MCICM
John Pears
Peter Wallwork MCICM, CEO of Credit
Services Association
Perhaps the biggest issue facing the consumer
collections industry in 2019 is that there are so
many issues to contend with. Some are well
known, such as GDPR; others have also been
waiting in the wings for some time – such
as the Senior Managers and Certification
Regime (SMCR) – where the countdown to
full implementation for regulated firms has
already begun.
Great uncertainty still exists over Brexit,
and how this will impact our industry, and so
too the progress of the new Non-performing
Loans (NPL) Directive and whether the
European authorities will heed the concerns
we have expressed.
Closer to home, however, we have a range
of issues to tackle. I sense that the concept
of ‘fairness’ will be a major focus in 2019, as
evidenced by ongoing debates over Breathing
Space and statutory payment plans.
‘Fairness’ will not only be about fairness to
the consumer, but also ensuring fairness
in how the debt advice sector is funded,
and in improving the quality of debt advice
available.
To that end, data will assume even greater
importance in the year ahead. The recent
news regarding the Fairshare contribution of
our members (almost £25 million) to funding
debt advice is a good example of where
strong, tangible data can inform a rational
conversation. Dialogue and consultation
become less about sweeping generalisations
and more about intelligent, informed
debates.
Another issue is education and within that
professional development. We must ensure
we continue to invest in the right level of
training and apprenticeship provision to
further improve the level of professionalism
within our industry, and with that, how our
industry is perceived. This is about creating a
virtuous circle, enhancing the profile of our
industry through the quality of the people
working within it.
Steve Murray MCICM, CEO of Ardent
Credit Services
On a macro-economic level there are a series
of events all conspiring to reduce customers
disposable income, from Brexit itself and the
possible recession that will follow to interest
rate rises (widely tipped to rise mid 2019 as
long as there isn’t a Brexit aftershock). The
Bank of England last raised interest rates
in August and for only the second time in
a decade and both were modest increases.
A whole generation of homeowners, many
of whom are just about managing, have
never seen significant interest rate rises and
another increase will surely tip more people
into debt.
It shouldn’t be forgotten as well that PPI
pay-outs stop in August 2019 – a process that
has pumped £33 billion back into consumer’s
pockets since 2011. There is a fallacy that
DCAs do well in economic downturns and
the reality is that while debt levels increase,
the ‘quality’ of that debt reduces, and costs to
collect increase. The challenge facing DCAs
in 2019, therefore, is to continue to perform
compliantly for its clients against a backdrop
of increasing costs and customers with less
disposable income and that takes investment
in technology to build efficiencies and
smarter routes to customer contact solutions,
which is exactly what Ardent is doing.
John Pears, UK Managing Director of
Lowell
‘Customer Engagement’ – this is such a
multifaceted issue and the most fundamental
to our industry. Even a small shift in
engagement has a much bigger positive
impact on our businesses, and potentially the
wellbeing of customers.
The challenges we have should be clear
to all: as an industry our reputation remains
poor and our image is driven by the lowest
denominator shown in the media; the
accuracy of address data means we are not
always contacting the right people; tone of
contact can create barriers, and digitisation
capability does not yet meet customers’
service expectations, based on their
experience of banks and retailers.
Ultimately, the engagement challenge is
simply that people don’t choose to be our
customers and most often arrive with us in
a difficult position. Often they are worried,
embarrassed and need help. As such, getting
any contact about a defaulted account is the
last thing they want, but if the approach is
right, it could well be exactly what they need.
As an industry we have to push all of our
members to deliver a better level of service,
one that considers the individual and their
circumstances. We’ve got to actively promote
this to consumers, so they understand our
primary role is to work with them to find the
The Recognised Standard / www.cicm.com / January / February 2019 / PAGE 14