Ethical Strategies

The debt collection and purchase market over the past 5 years has shown an upsurge in activity. Direct Bailiff Services Limited and Churchill Recovery Solutions Limited have, in the past 12 months, worked hard to design economical collection programmes that are both realistic and challenging to meet a demand that the whole industry is experiencing.

There has been an overwhelming amount of interest in the debt collection industry but also further recent criticism from people who believe that the debt recovery market shouldn’t have their own collection agency awards. My view is clear; professionalism and good practice should be honoured in every industry and the debt collection industry should not be viewed any different.

Collection departments, both in-house and within debt agencies, have never been under such pressure to perform. With creditors facing regulatory pressures from a whole host of government departments, watchdogs and quangos, the behaviour and focus of instructing clients has shifted more to a rescue culture with legislative changes making an array of formal insolvency solutions increasingly more attractive and available to debtors.

The Changing Face of Debtors

The profile of the typical insolvent debtor:
• Male
• In-rented accommodation
• Debts 2.5 times net of household income

How has this position arisen?
• Want
• Peer pressure
• Education
• Easy credit

So what lessons can be learnt and are debtors actually responsible!?!

We work in devising collection strategies for clients with effective results. The view is taken that poor decisions equal greater cost and poor results. We make it our business to know our debtors; we assess the prospect of success in order to achieve appropriate and effective collection routes.

Careful preparation = less cost + good results

Total Credit Management Services

A landlord’s right to take action against non-paying commercial tenants is an ancient and effective remedy that is more commonly known as the Law of Distress.

The action referred to as Distress is the appointment of a Certificated Bailiff, without the need of a Court Order. However what does a landlord do when the tenant has disappeared? Is it a matter of writing the debt off?

The economic down-turn has recently produced such headlines that 250 shops will close a day in 2009 and the number of businesses that will enter into Administration this year will treble against year-on-year statistics.

The need for additional support services is ever-more present as the UK continues in financial melt-down.

In the past 6 months alone, our business Churchill Recovery Solutions has seen significant trace and debt recovery case submission increases, with landlords looking to pursue individuals as guarantors against outstanding debts.

The credit management industry is competitive and rapidly growing, after the pause during the early 90s, the provision of credit remains fundamental to our commercial society. Credit screening and scoring are greatly improved, after the experience of the last, deep recession. Yet, there will always be debt and there must be a professional industry for its collection. To recognise the bad credit risk must be first base. However, where credit screening fails and in-house collection activity is not working, the involvement of a Debt Collection Agency is increasingly the preferred solution.

The collection of debt embraces, not simply the Credit Industry, but also major markets like; ex-Public Utilities, Parking Control, Universities to name just some.

The old adage that ‘prevention is better than cure’ can seldom have been more apt than in the credit business market today.

Slow paying and bad debts simply add to costs, impacting both directly and indirectly upon cash-flow and profits. A little caution at a modest cost is well advised.

A working partnership is key to any business relationship.

We all know to our cost that pursuing cases through the Courts is costly, time consuming and provides no guarantee of recovery, worst of all you are required to make decisions and further fund cases, where you will have little or no idea of the debtor’s circumstances.

As modern businesses return to core products and activities, it’s important for them to establish and progressively develop partnerships with external contractors. In fact, the term external is not entirely appropriated, since the relationship should be so close that the contractor is perceived as an integral part of the business.

The need for sensitivity is paramount when working any portfolio, given the implications for communication, supervision and control.

At crs we’ve deployed a range of credit management collection solutions; the most flexible and best quality lettering, telephone collections backed with a door-to-door collection team throughout England and Wales and close working litigation agencies.

For us, our commitment and transparency is written into our business and services, importantly we are already working successfully with a wide range of clients and our testimony is our ability to deliver a service with a good net return.

Byron's Notepad

There have not been many evenings of the past couple weeks were I have switched on the television or radio and not listened to a news report of another UK retailer or manufacturer going into Administration.

Administration is a legal and legitimate act that prevents landlords and bailiffs from commencing or continuing with an action against a tenant, without either leave of the court or the consent of the administrator.

Over the past quarter we have seen a number of well known and established high street names disappear and seemingly the Christmas trade did little to encourage the markets that 2009 will be any better. In fact we are told that 2009 will be harder with more businesses closing their doors for the last time. Indeed dbs have seen case instructions treble month-on-month as landlords and property management agencies send in the bailiffs to recover rent arrears.

Arguably good times for the enforcement industry you would presume? Yes and no really I suppose is the answer with constant talk of the Credit Crunch, perhaps the pendulum swung too far for some clients last quarter? I spoke with a number of our clients throughout the quarter and was not surprised to learn that some landlords were instructing agents not to take any recovery action and in some cases not to demand rent, in order to keep tenants trading. The clever thing about statistics is that you can create a positive or a negative, but certainly one statistic that is evident is the increasing number of tenants seeking payment-plans.

As a commercial service-support business, we are constantly working hard to provide clients with immediate collection solutions. Recently dbs developed and launched PD3 our new Protective Distraint Recovery Programme. PD3 is designed to provide pre-enforcement internal telephone, bespoke lettering and protective distraints, securing and impounding the tenants’ assets giving the landlord priority title during an agreed repayment-plan managed by dbs. With talk of a recession and increasing unemployment the government must now look ahead and plan to deliver effective and stronger policies in 2009 that are not just words in glossary reports. It is, I believe, a reasonable and realistic statement to make when I say the high street and industrial estates have a long and difficult way to go yet before we stop the talk of financial meltdown.