Lloyd Birkhead, Managing Director at Echo's wholly owned debt collection agency Grosvenor Services Group, pops in to tell us about 5 changes he's noted in debt recovery since back in the day.......
The field of utility debt recovery, some 13 years ago back in 2002, was quite a different place. For many debt collection agencies, significantly less emphasis was placed on areas which are today now critical to an effective, fair, regulated and considerate approach to consumers who are facing difficulties in making payments. There are five key areas where, in my experience, the main changes have occurred………..
Improvements in standards.
‘Ungoverned, unregulated and uncontrolled’ are all fairly scary terms which could be used to summarise the operational practices of many debt collection agencies at that time.
Any DCA could approach a utility company, profess to be able to offer an effective collections service, and with absolutely no background or credibility checks of any kind, be given a ‘trial batch’. These agencies, often with sub contracted, ill equipped, untrained staff would then visit the customers of major UK utility companies to facilitate the collection of debt or a resolution to an outstanding payment problem. This in turn had a negative impact on agencies like Grosvenor who did have the right people, skills and experience in place to deliver.
By contrast today, things are quite different! All agencies quite rightly have to ‘jump through all kinds of hoops’ when competing for work via tender, factors such as being established, experienced and financially stable are all now deemed critical ‘must haves’ by utility companies looking to select an external debt collection agency, after all they are trusting an agency with their all-important customer relationships.
Governance and regulation.
Today, collection agencies are usually members of, overseen by, and have to comply with the stipulations of several regulatory bodies such as the Credit Services Association - the only national association in the UK for companies active in the debt collection - and the Financial Conduct Authority, whose aim it is to make sure that financial markets work well so that consumers get a fair deal.
Whilst these memberships can be expensive and time consuming, they are absolutely essential for the maintenance of standards within the industry as consumer debt management continues to be increasingly under the spotlight from regulators and the industry alike.
Consumer care and awareness.
I’m pleased to say that great improvements have been made in this area with both debt collection agencies and utility companies being far more focused on, and sympathetic towards, consumers’ predicaments with regards to their financial position. Engaging early, understanding and building trust when communicating with consumers were things that Grosvenor were already doing and its great that these are now widely acknowledged as the key to successfully and fairly collect debt.
Protection for vulnerable customers - due to disability, mental health issues and other areas, affordability and treating customers fairly are all topics which must now rank highly on the priority list for any debt collection agency operating in today’s marketplace.
Making it easier to pay.
Historically, a good old letter would be sent to the customer by post, along with a telephone call, prior to any further collection action being taken by an agency. In contrast, today we now have the luxury of a multi-faceted approach to contacting our target audience and for them to in turn get in touch with us.
Alongside letters and telephone calls, we now utilise SMS Messages, emails, extended opening hours and the facility to pay directly via credit/debit card or online. This not only gives consumers more choice and encourages them to make contact; it also increases our opportunities to contact them, both serving to enhance collection rates for clients.
A smarter approach.
Lastly, I remember the days when all of our work was paper based, bundled into large envelopes and sent all around the country to our field operations staff. This of course had all the inherent problems of postal reliability, damage and loss of paperwork. This paperwork was then returned by post to be manually typed into a report for the customer! How labour intensive and time consuming it was back then! In contrast, today we send out and receive work electronically, which is converted into a report to email back to the utilities client. Simple, accurate and fast.
So in summary, the industry a long way ahead of where it was, in all areas of service provision from both a customer and a client perspective, working practices have been streamlined, rationalised and legislated. More than ever, the customer is now at the heart of debt collection strategies - all of which can only be good for the debt collection industry, clients and their consumers.
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