Debt collection industry faces “perfect storm”

Debt collection industry faces “perfect storm”.

I have just read the ab0ve article on Credit today. Anyone who knows me, will know i have been saying for a long long time that the debt purchase / collection industry is headed for a real problem if it didnt change and do it quickly.

The stories which i hear from clients are of agressive tactics which simply demand unmanageable amounts of money and do not stop to take stock of the debtors circumstances. The old saying you cannot get blood out of a stone springs to mind.

Now in my view, notwithstanding the fact that most regulated consumer credit agreements can be made subject of a time order under s129 of the Consumer Credit Act 1974 (as amended), i do not see why debt collectors employ this inflexible approach. If a debtor doesnt have the money to pay what you ask then it becomes pointless demanding it anyway. What seems more logical is if the debt collector agrees to accept the sum that the debtor can pay. At least he is then recovering something and the debt is being paid and more importantly the debtor is not being harrassed unnecessarily.

In my opinion, it is more the fact that people when they get pushed into a corner come out fighting that is causing the debt industry problems. Many of these people find their way to my firm and then when an assessment of the facts is carried out, often the debt being pursued is found to be irrecoverable for numerous reasons.

What costs the debt purchase industry more,is in the cases i have been the fee earner on, is that they launch legal action without carrying out a full assessment of the case being taken to Court. Often the debt purchaser doesnt even have the credit agreement which under pins their claim and do not even know what clause of the agreement is said to have been breached. Often there is a s78(1) Consumer Credit Act request outstanding which prevents the creditor from getting a Court judgment and yet they still press on with fruitless and ultimately expensive litigation.

The debt industry really does need to stop and take a look at its self. In fact i told one DCA solicitors that the case they had just lost against me , i would have won, it was simply the fact that the Claimant had failed to carry out a proper assessment of the case and put right the errors. That failure cost them close to £30k.

I am quite surprised actually that the DCAs havent approached us to represent them, then again, im not sure i could.

About paul @ watsons solicitors
Member of Chartered Institute of Legal Executives and a litigator for one of the leading firms of solicitors in Consumer Credit Act litigation. I was the fee earner in the landmark ruling of Harrison v Link Financial Limited and many other County Court decisions.

One Response to Debt collection industry faces “perfect storm”

  1. gladys morris says:

    I find your comments very interesting as I am being chased by arrow global.
    they have a signed application for a visa which I don’t deny. year (2000). However they say it is a Master card. On the application it says visa. on another page it gives it as a Master. On arguing about this, was told that memba had changed it to a master. However, I used the visa for some time, and I am certain it was not changed. Maintain it could not have been without my having been told, and some paperwork. Am collecting paperwork before consulting yourselves.

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