In October a feature on “You and Yours”, the BBC Radio 4 consumer affairs programme, covered a letter purporting to come from an external debt collection agency. Not an extraordinary event in itself, but what made this letter capture the programme’s attention was that, in fact, it had been sent directly by a water utility company to a customer in the guise of an external agency. The revelation that some water companies were now sending misleading letters to their customers followed news that organisations in other industries had also been engaging in this practice.
The issue of such letters is perhaps a symptom of some of the major problems such companies face concerning growing levels of consumer and household debt. Indeed, in August a report from financial research company Verum revealed that these problems are only likely to get worse. UK household debt rose 314% from 1990 to 2013 and now stands at £1.4tn, while levels of personal debt are highest among the 35-44 age group.
While consumer groups, the media and regulators were understandably quick to criticise these practices as “unacceptable”, alternatives were not so forthcoming. Meanwhile as levels of personal debt among consumers are rising the existing measures put in place by these companies to recover amounts outstanding – such as repayment reminders – are proving ineffective. Debt collection, which is a large and growing sector, remains an area ripe for supplier and consumer disagreement.
Consumer debt collection activity now falls under the responsibility of the FCA, having taken this over from the Office of Fair Trading (OFT) and it is evident that new approaches are required to develop a more consumer-focused approach. One of these could be the development of industry benchmarks to boost professional standards and practices, and with that in mind, ifs University College – the university for financial education – recently launched a qualification to help professionals working in the industry. The Certificate in Consumer Debt Collection (CertDC®) has been developed in partnership with leading industry stakeholders to provide practitioners in debt collection departments with the skills and knowledge they will require in their day-to-day roles and for their future career progression.
The qualification focuses on both professional and technical skills. Three modules look at the broad environment of the industry, how it fits in with the legislative and regulatory framework set out by the FCA and the processes employed by the industry. The programme has a focus on developing consumer-centric solutions.
Encouragingly, uptake has already been high, with several large financial services institutions putting their debt collection department employees through pilot schemes. The first of these cohorts are expected to complete the qualification in early 2015.
Hopefully, it will be through the likes of CertDC® and other professional qualifications that in the future “letters”, will refer to the professional designations after a practitioner’s name, rather than those of the misleading kind.
Fore more information about CertDC®, please click here.
