Blog: 2016: The year the debt collection sector came of age

Peter Wallwork is chief executive of the Credit Services Association, the UK trade body for the debt collection sector. Here, he reflects on the Association's activities and successes in 2016.

2016, despite its many challenges, seems to be the year that the debt collection sector has 'come of age' in terms of how central the customer journey has become to the culture of our businesses and, whether FCA regulated or not, standards of compliance and customer treatment have continued to improve significantly, for which we can all be proud. This is in a large part down to our effective engagement with a wide range of stakeholders which has enabled us to position ourselves as key influencers and ensure that our knowledge of the industry and the consumer is used for the benefit of all.

Success on Pre-Action Protocol for Debt Claims

It was great to finish the year with a genuine highlight. Our President, Leigh Berkley, has been sitting on the Ministry of Justice Civil Procedure Rule Committee (CPRC) subcommittee responsible for developing the Pre-Action Protocol for Debt Claims (often referred to as PAP). He sat on the subcommittee with Rob Thompson of the Civil Court Users Association (CCUA) and fought hard for approximately two years to lobby the industry's view on the matter. At the main CPRC meeting on 9 December 2016, attended by the Master of the Rolls, we were successful in gaining agreement that creditors will not need to send out the original agreement at the Letter Before Action (LBA) stage and this, along with a number of other concessions gained since the last consultation in January 2016, will make the new protocol much more workable for the creditor and much less intimidating to the consumer, whilst still retaining the intended benefits. More news will follow on the finalised PAP and implementation period, but this has been a great example of how we can pull together to protect the interests of the consumer and the CSA Membership.

Engaging regulators

Overall, I hope you will agree that the CSA Board has continued to drive standards upwards in 2016, as well as providing crucial advice, L&D support and guidance to Members as we navigated the path from FCA migration to FCA authorisation. Since 2014, we have continued to forge strong links with the FCA, meeting at least on a quarterly basis. We have advised them on how the industry works, and given assistance on numerous issues such as the various thematic reviews and consultations, the issues surrounding the authorisation of fee-charging debt management firms, and ongoing fees and reporting. We are often consulted as the FCA are forming their opinions or scoping their work prior to public consultation, most recently on the forthcoming Senior Managers and Certification Regime. This is a valuable opportunity only afforded to trade bodies like the CSA, and from this engagement we have achieved some very good results. We are currently working with the FCA to create a 'common misunderstandings' document that should help to dispel industry myths and clarify a number of important issues. We have also been lobbying for a sensible outcome to the annual review of debt management plans (DMPs).

Beyond the FCA, we have supported Members who cannot be FCA authorised because they do not undertake relevant activities. We have lobbied Ofcom since their draft statement on the use of diallers first came out, and have just very recently received the revised policy statement from the regulator. We are currently reviewing the policy and will engage with the regulator and issue a further statement early in the New Year. We are also pleased that Ofcom has confirmed they will attend our upcoming Members Meeting and AGM on Tuesday 7 February 2017 at Leicester Marriott Hotel.

Bringing the industry closer together

As I write this, I am very proud of the strong links we have established and nurtured within the new regulatory regime, the debt advice sector, and with other trade bodies and stakeholders.

I continue to sit as an observer on the Lending Standards Board, and we have been working proactively with HMT whilst they explore the possibility of a statutory breathing space for customers and the viability of making fair share contributions the method of choice for funding debt management. We have also been representing the industry on a Cabinet Office working party on fairness in Government debt collection, and working with the Money Advice Service on the new Standard Financial Statement. This year, Leigh Berkley joined the Board of the newly incorporated Money Advice Liaison Group (MALG) with new Chair Liz Barclay, and was elected to the Board of FENCA and appointed Vice President, where his portfolio is to work with FENCA members to develop a Pan-European Code of Conduct for our industry on the General Data Protection Regulation, and a wider second Code for Collections. These Codes should help us get the interpretation we need from the new data protection regime, and also forestall further regulation from Brussels that would affect our industry, regardless of Brexit.

Continuing the hard work

We may be coming to the end of the FCA authorisation process, however times have never been busier or more challenging, and I would like to thank the Board of the CSA, and the exceptional team at Head Office for their support, dedication and hard work.

2017 is going to be a big year for the Association and we will start it in a very strong position with the future of the debt collection sector looking brighter than ever.