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Archive for June, 2009
Wednesday, June 17th, 2009
An investigation into plans on how to share credit data across Europe has been published and it details a series of proposals to help improve credit checks.
The European Commission set up the Expert Group on Credit Histories (EGCH) as a means to identify and overcome the obstacles in sharing credit data across Europe and the ECFH’s report has revealed it is AGAINST the creation of a single pan-European credit register.
It is thought that if the move had gone ahead, the potential cost to UK banks could have been in the hundreds of millions of pounds each. Given the fact that UK banks are ahead of a lot of their European counterparts in credit data management, the report seems to have some valid points, particularly including the creation of such a register does not seem to be a realistic or effective option.
In a crucial move for the credit industry to promote cross-border responsible lending, the EGCH has proposed that access to credit data for the purpose of credit checks should be possible throughout the credit lifecycle and after the expiry of the credit agreement. This, the report states, would serve the purpose of risk assessment, account management, debt collection, debt recovery, fraud prevention and money laundering prevention.
The preliminary report, entitled Access to Credit Histories, recommends that creditors be given free choice between all access models available to them, depending on the business case and data protection rules. The EGCH said the indirect access model may be the most suitable, as a first step in generating a cross-border market.
In a significant move the group has also recommended that the Consumer Credit Directive could be used to ensure that foreign creditors get the same level of access to credit data as local creditors in that country, without barriers.
The report also recommends that national data protection authorities work towards more harmonization in the interpretation of data protection rules and in their practices in order to facilitate the process of cross-border credit data exchange.
The proposals also state that the use of data across borders should comply with the national rules of the country from where it is accessed. The EGCH has also recommended that action be taken to ensure a level of convergence, at cross-border level, over consumers’ access conditions.
Tags: credit checks, debt collection, debt recovery
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Tuesday, June 16th, 2009
From time to time almost all business owners will be faced with the issue of bad debt. As a result, it is imperative that plans are put into place should bad debts arise so that the business is able to receive payment as quickly and efficiently as possible.
For some business owners, writing off bad debt is all part and parcel of running a business. While, to a limited degree, this is true, it is imperative that a business doesn’t just write off a debt without pushing the debtors for payment wherever possible.
A study that was performed by Leeds University showed that 30% of bad debts came about because of issues with cash-flow or that systems and procedures were holding up payment. Keeping that in mind, often a single letter from a debt collection agency that advises the customer that there is an outstanding balance is all that is required to secure payment.
Also, appointing a debt collection agency for the purpose of debt recovery does not necessarily mean the end of a business relationship – most customers will understand that all you really want is payment for the goods or services that you have provided.
Tags: debt collection, debt collection agency, debt recovery
Posted in Debt News | No Comments »
Monday, June 15th, 2009
In these current finanically stricken times, more and more creditors have turned to international debt collection as a means to survive.
With the severe financial crisis that the majority of the planet has experienced over the last 12 months or so forcing many countries into recession, Governments around the world are making previously unheard of efforts to restore consumer and commercial confidence.
The aim of this, of course, is to minimise the effects of the global downturn, especially in the worlds major countries, will help to revive the global economy.
While many experts have claimed this as “wishful thinking” there is no denying that there has been a concerted effort by Governments around the world to put a halt to these poor economic conditions and try to rebuild shattered confidence.
Using Australia as an example, we have seen a budget surplus in 2008 of more than A$20 billion wiped out as the Rudd Labour government has implemented steps to stimulate the domestic economy, whilst at the same time save jobs, and either prevent or at least slow down the unemployment figures.
West Australia which had seen a boom period for more than a decade has been impacted more than any other State in the country, and the mining industry, which had been responsible for much of the growth in employment has been forced to take action, and in the past two months alone has laid off thousands of workers and adopt ways of reducing their exposure to the downturn in exports of minerals to the huge China market.
This alone has meant employees from the eastern States of Australia, along with an estimated forty thousand workers recruited from New Zealand are facing hardship in meeting their day to day living costs, along with housing repayments, school fees etc.
The same story is being heard in many countries around the world, and India which is a market leader in IT services such as BPO and IPO call center’s has also been hard hit as multi national clients reduce their budgets; in many cases substantially leading to termination of service contracts.
Even if the global markets were to recover in the next two quarters, (and that is highly unlikely) or even partially recover, it is increasingly obvious that the global collection industry is going to continue to see a huge increase in the levels of consumer and commercial debt, whilst at the same time the capacity to meet this increased debt will have reduced substantially, due to rising unemployment impacting on the consumers ability to meet their financial obligations.
The fall in consumer spending has already impacted adversely on retail sales and the forecast for this trend is for it to continue and to rise, which will see further retail outlets closing their doors, due to bankruptcy.
Equally, commercial markets such as commodities have been in a downward spiral for the past year, demand continues to lessen, and medium to long term contracts for supply of raw materials to the major manufacturing countries of China and India are being re-negotiated to reduce either quantize to be supplied or see the price negotiated downwards.
Tags: international debt collection
Posted in International Debt News | No Comments »
Friday, June 12th, 2009
A “relaxed attitude” from kiwi firms to collecting debts is finally changing as pressure tightens on the bottom line according to Dun & Bradstreet.
The credit reporting and collections agency said today the number of debts referred for collection has more than doubled in the March quarter compared to the same period last year, and the average dollar value of each collection has also increased.
Debt collection referrals from Auckland firms increased by 160 percent in the first quarter, while Wellington firms saw a 139 percent increase and Christchurch firms referred 134 percent more collections than last year.
Overall, New Zealand businesses reported 127 percent more debts for collection in the March quarter this year than in the same period last year.
Auckland firms were also the slowest to pay during the March quarter, averaging 51.3 days to settle accounts. Businesses based in Christchurch and Wellington averaged 48.5 days and 29.9 days to settle accounts, respectively.
The value of debts for collection also increased, with the average outstanding debt being chased in Auckland valued at $2300, a 32 percent increase from last year. Christchurch firms saw a 10 percent increase in debt values, with the average debt being $1975.
Wellington firms bucked the trend with debt values declining 46 percent from the March quarter last year to $1500 on average this year.
Dun and Bradstreet general manager John Scott said New Zealand firms have recognised that a relaxed attitude towards debt collections was no longer sufficient in the new business environment.
“When the economy was booming executives were able to take a relaxed approach to their receivables process without suffering significant detrimental impacts. However in the current environment where cash flow is of paramount importance, ineffective management of debtors will only result in your bill ending up on the bottom of the pile,” said Scott.
“As a consequence, cash flow and receivables management have come to the fore as executives have realised the critical role they play in ensuring the sustainability of business.”
Tags: debt collection, international debt collection, new zealand debt collection
Posted in International Debt News | No Comments »
Tuesday, June 9th, 2009
The government is owed more than 17 billion pounds in unpaid taxes and nearly a third of all payments were late in one financial year, MPs said in a criticism of tax collection methods on Tuesday.
The House of Commons Public Accounts Committee condemned Her Majesty’s Revenue and Customs (HMRC) for the rising number of tax arrears in the 2007/08 tax year, saying it failed to use the latest private-sector debt collection methods.
The cross-party committee said 30 percent of tax payments were late in the year to March 31, 2008, and the total number of tax debts was 22 percent higher than the previous year — taking the sum owed to 17.3 billion pounds.
Chancellor Alistair Darling expects Britain to run a record budget deficit of 175 billion pounds this financial year, and much the same again the year after.
“The department must try every means it can to tackle what is likely to become a growing problem of tax debt, while making allowance for people and businesses in temporary financial difficulties,” said Conservative MP Edward Leigh who chairs the public accounts committee.
But HMRC said the big rise in total tax debts was largely due to accounting changes, and that debt collection had improved greatly since then.
“The report is not a reflection of HMRC debt activity today,” it said, pointing out that things had changed quickly since last year.
“HMRC has made even further progress since the Public Accounts Committee held its hearing and the detailed National Audit Office report which the committee considered was prepared,” it said.
November’s NAO report showed total tax outstanding in 2007/08 was down to 3.8 percent of tax owed — a level comparable to other countries — from 4.3 percent in 2005/06.
Tags: debt, debt collection
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Friday, June 5th, 2009
In the last financial year, Anglian Water estimated it lost around two percent of its annual revenue as a result of customers who failed to pay their bills. Considering that in the last financial year Anglian Water turned over about £1bn, that two percent worked out at about £20 million.
As a result Anglian Water decided to invest in their IT infrastructure to help minimise the lost revenue which it says can, if the losses are eradicated over the next two to three years, save customers £11 off the bills that are sent out.
Customer service director for Anglian Water, Martyn Oakley, said that the company was under pressure from its shareholders, customers and OFWAT to collect as much of the debt as possible and as a result had to investigate every means available to bring the figures down.
“It is certainly not going to get any easier in the current economic climate, especially as there is no sanction of disconnection with water supplies. We have fundamentally large proportions of debtors that owe us money now who are still using the product, thereby generating still more debt all the time,” he says.
One of the primary problems that faced Anglian Water was how to extract data from its SAP IS-U customer care system, a system developed specifically for utilities companies, about bad debtors.
In an effort to speed things up and minimise the the amount of lost customer details that slipped through the net, Anglian Water introduced the SAP billing system along with Experians Tallyman debt collection management software with the aid of systems integrators CSC.
“The key thing was configurability – the debt system needed to be flexible enough for us to change the strategy around the way we collect debt, and SAP was too hard and inflexible in this area,” says Oakley.
“Tallyman puts the agent in control, with all the key facts on a single screen, making it easier for us to test and change strategies.”
“We cannot quote a number on the bad debts [recovered] yet, but we believe we will see a return from the financial perspective in the first few months,” says Oakley.
“What we can say is that within a couple of weeks of going live we were able to trace around 30,000 customers through the various debt collection agencies we use. And whereas previously we would have to have manually updated all of that information using the billing system, it is now a simple upload through Tallyman and we have closed maybe two to two and a half months’ worth of debt recovery delay as a result.”
Tags: debt collection, debt collection software
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Thursday, June 4th, 2009
Interactive Voice Messaging specialist Qire has launched a business debt recovery solution to help creditors improve collection rates on unpaid bills and arrears.
The Voice CRM solution is already being widely used by credit management departments to improve consumer debt collection rates. By enabling more direct contact, the service also delivers higher average payments compared with traditional methods such as postal campaigns and dialler-based calling.
Qires Interactive Voice Messaging (IVM) technology provides a cost-effective and efficient means of achieving more direct contact with businesses in arrears. It automates the process of making telephone calls to named contacts, verifying their identity and then routing the call to a live agent to discuss their account and payment options.
By filtering out wrong parties before connecting them to an agent, IVM effectively turns an outbound call into an inbound call, significantly increasing agent productivity, to boost collection rates and improve debt resolution issues with businesses in arrears through more direct contact.
The solution can be used to contact businesses in arrears where a legal notice has been issued and the organisation has not paid, made an arrangement or been in contact, or where a business has missed a payment on an agreed plan.
A key benefit of the Qire solution is its ability to optimise call centre and agent productivity. Over 50% of agent time can be typically spent getting through to the right party using traditional methods, however, with IVM technology, wrong party numbers, dead numbers and answering machines are filtered out before an agent is connected, making them more efficient.
The solution also improves customer service, with call whisper functionality giving agents the customer details and account number when they are connected to help streamline call.
The Qire solution can be combined quickly and easily into existing debt recovery systems at low cost, for a more comprehensive and integrated approach to credit management. This enables account status to be updated in real-time, ensuring accurate and effective campaigns to be carried out, and guarantees agents have up-to-date information on calls handled.
According to Guy Cooper, CEO at Qire : IVM is already delivering real and tangible benefits in recovering consumer debt. Severn Trent has successfully recovered over 3 million in arrears in the first year of using the solution, with average payments being over 30% higher.
Tags: debt collection, debt collection software, debt recovery
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Wednesday, June 3rd, 2009
In today’s Britain, it is commonly accepted that every man and his dog has financial worries. Personal debt increases at a rate of £1 million every 4 minutes, according to Credit Action, and it is clear that people from all walks of life are being affected by debt and money issues.
Financial experts have noted that more and more professional, financially astute people are seeking assistance in managing their debts.
Michael Montague, a mortgage and debt advisor, said “Recently we’ve had evidence that debt is moving up the social ladder and affecting a great deal more people.”
“Historically, it’s been mainly blue collar workers struggling with their debts; now we’re seeing a lot more white collar workers with problems. In the last few months we’ve helped a vicar, an owner of a sports shop, a chemistry lecturer and even the head teacher of a private school.”
“The type of client you now see in front of you is normally very professional and forward thinking. They haven’t buried their head in the sand whilst bailiffs knock at the door, they know that they have financial problems and that if they continue, things are going to get worse. They’re bright enough to know when their clean credit history is being affected and they’re pro active in coming forward.”
Tags: bad credit, debt
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Tuesday, June 2nd, 2009
New York Governor David Paterson recently released a program bill that will significantly impact debt collection in the state of New York. Program Bill No. 28 aims to amend General Business Law Article 29-H in relation to debt collection practices. The bill would implement several restrictions on debt collection practices already set forth by the FDCPA but also adds new restrictions on creditors and debt collectors when attempting to communicate with consumers in the attempt to collect a debt.
Notably, the bill attempts to address the recent advent and growth in asset buying practices within the debt collection industry by requiring creditors and debt collectors provide notice to consumers when their debts are sold or transferred.
The bill also provides consumers with a private cause of action to enforce state debt collection statutes and permits consumers to enjoin collection practices and recover $2,500 per wrongful act or actual damages, whichever is greater for a violation of the provisions.
If enacted the bill would become effective on the succeeding January 1 after it becomes law. View the current text of the bill and the governor’s memorandum. The bill has not been introduced in the New York State Legislature as of June 2, 2009.
Tags: debt collection, international debt collection
Posted in International Debt News | No Comments »
Monday, June 1st, 2009
If you have ever wondered how a debt collection company has been able to track you down, or the company that you have dealt with have been expertly efficient, it may have been in no small part thanks to a small Canadian software company.
Comtech Systems, based in Victoria, have been working on debt collection software solutions for over 21 years, helping to arm the industry with the tools it needs to collect those debts. Founded by Fritz Schulze in 1988, Comtech has developed the “Collect!” software package which improves the efficiency of both collectors and operations.
Collect! is built with the receivables business in mind. Because Collect! is easy to learn and use, companies can focus on collecting instead of worrying about getting organized. Collect! chosen by more than 1,200 companies in 35 countries, helping receivables management professionals organize their operations, enhance staff performance and improve profitability.
Over the years, the effectiveness of a letter or a phone call may have declined slightly, but utilising newer technologies, such as SMS (short messaging service), a facility which currently has an estimated 90% read rate, debt collection agencies have been able to continue to help consumers and businesses alike in the recovery of their debts. Comtech Systems continue to provide facilities such as these and more in there continued attempts to help steamline the debt collection industry.
Tags: debt collection, debt collection canada, debt collection software, international debt collection
Posted in International Debt News | No Comments »
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