Developing a Code of Practice for all Debt Collection Peter Wallwork MCICM CEO, Credit Services Association

A Code of Practice for all Debt Collection Who we are, what we do What we want to achieve What our positions are on the issues What sector of debt collection we represent What the Code of Practice is What the problem is What we are doing about it What you can do to help

Credit Services Association The Credit Services Association (CSA) is the only UK Trade Association servicing the Debt Industry – includes debt collection, debt purchase, tracing and other allied services The CSA represents 90% of debt collection and debt purchase activity within the industry

Credit Services Association Circa 300 members: £57.5bn of debt held for collection = 48.5 million accounts £50bn owned by debt purchasers £4bn collections returned to the UK economy each year Recognised Industry Code of Practice Works closely with the Industry Regulators, Government and other Trade Bodies

Credit Services Association – Membership Change in Membership since change in regulator to the FCA in 2014: Members in 2012 – 422 Members in 2014 – 346 Members in 2017 – 301 M&A activity - consolidation Change in shape of membership

Lobbying “voice of the collections industry” The CSA has a strong consultative relationship with industry bodies, regulators, government and industry arbitrators; Financial Conduct Authority / Ofcom / Ofwat / H M Treasury / Ministry of Justice / Cabinet Office / Information Commissioner’s Office / Financial Ombudsman Service / Lending Standards Board Plus other industry Trade Bodies including: UK Finance / CCTA / CCUA

Lobbying “voice of the collections industry” Key Lobbying Goals: Change Perception of the Industry Achieve a Level Playing Field for debt collection Establish the Code of Practice as the common standard for all debt collection

Challenging Times… General Data Protection Regulation (GDPR) Data Protection Act 2018 – live from 25th May 2018 Senior Managers and Certification Regime Replaces Authorised Persons Regime CP17/20 – Incentives Remuneration and Performance Management FCA review posted results March 2018

Challenging Times… Standard Financial Statement (SFS) Trigger Figure review and increases Call from CSA to Debt Advisers Peter Wyman Report for MAS Challenge to industry to pay Fair Share CSA believes the owner of the debt should pay

Challenging Times… Breathing Space – Debt Respite Scheme CSA Agrees it tries to contribute to a level playing field for collections but will it succeed?? Risk to industry of over-complicating existing ‘informal’ Breathing Space in CONC and CSA Code Change to CCJs following MoJ Consultation CSA Broadly agrees with proposals

How do Debt Collection Agencies rate in the scheme of things? Water Companies 78% LA’s - Council Tax 69% Social Landlords 65% Debt Collection Agencies 63% LA’s - Benefits 63% Banks 62% Energy Companies 59% DWP (Benefits) 47% HMCTS (Court Fines) 40% Mobile Phone Providers 37% HMRC (Tax Credits) 34% *Best practice league table as rated by Citizens Advice Bureau advisors - January 2016 Is there a two-tier problem developing with gov’t debt collection ? Are consumers in the hands of in-house gov’t debt collectors receiving less favourable treatment than those dealing with external FCA regulated DCA’s working for gov’t dept’s ?

Who do we mean when we talk about debt collection agencies? It’s quiz time!

What are these called?

What are these called?

What are these called?

What are these called?

What are these called?

But the problem is… They are all just Bongos to the general public – or at least they are all just drums Only does the specialist who knows the industry really understand what each drum is, where it comes from and the noise it makes when someone hits it with their hands…

All of these are just debt collection, aren’t they?? Debt Purchasers Early arrears Reconnection visits The Courts Debt Collection Agencies Legal Enquiry Agents Field Collectors Tracing Agents Enforcement Officers Mortgage Arrears Counselling

CSA Code of Practice We developed our Code of Practice, a Code recognised as ‘best practice’ by the Office of Fair Trading (OFT) and subsequently used as the basis for the Debt Guidance document developed by the FCA We have also recently updated the CSA Code of Practice to include the high level standards of the FCA Regime: Threshold Conditions Principles of Business Systems and Controls Consumer Credit Rules

Going from Best Practice to Industry Standards Should we be trying to have a standard more consistently applied across the industry? Yes  Why are we even asking this question?

Should we be trying to have a standard more consistently applied across the industry? Significant changes in Financial Services debt collection over the last fifteen years The ‘Regulatory Journey’ through time The FSA and Treating Customers Fairly We don’t call people in debt ‘debtors’ any more Finding the right outcome is the right thing for everyone

Should we be trying to have a standard more consistently applied across the industry? Why not? Our debt is different We have no choice but to supply We don’t get to choose our customer We have to continue to supply We can’t afford to be soft on debt We’ve no alternative

Multi-Regulatory Framework Should we be trying to have a standard more consistently applied across the industry? Why not one regulator for all debt collection..? What standard should we use..? How would it be applied..? Who would police it..? Is the CSA Code of Practice The Common Denominator ?

What you can do to help… Support the CSA Code of Practice as the defacto standard for all debt collection Tell us if you see something in the Code that you think needs changing and we’ll consider making a change to it Tell us if one of our members doesn’t do the right thing!

Credit Services Association QUESTIONS ?