Debt collection agencies are tracking down £60bn
First published figures reveal government is making increasing use of outsourced debt collection
Article by: Hilary Osborne, Guardian.co.uk
Almost £60bn of unpaid consumer debt had been passed to debt collection agencies by the end of 2011, with government departments increasingly using agencies to recover outstanding money, according to the first set of figures published by the industry.
The figure grew by £6bn in the second half of the year, and the Credit Services Association (CSA), the trade body for collection agencies which published the figure, said that the amount of outstanding debt had been steadily increasing in recent years.
Most of the debt has been passed on by mainstream lenders, but utility companies and phone providers are also using debt collection agencies, as, increasingly, are government departments such as HMRC and the Treasury. The CSA said payday loan companies made up just “a smattering” of those lenders using the 90% of the industry it represents.
A spokesman for the CSA said there had been “a cultural shift” which meant more government agencies were outsourcing debt collection.
The CSA’s president, Sara de Tute, said: “The economic environment has undoubtedly become more difficult and so it is no surprise that debts are rising.
“But there are also other reasons, including ‘new’ creditors within the private sector and parts of national government who no longer see an issue with outsourcing debt for collection to professional and highly regulated agencies capable of recovering monies vital to the public purse.” …………………….