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This is the first time details of the number and value of unpaid debts has been published in a study by the Credit Services Association (CSA), the national body for the UK debt collection industry. The figures are a measure of the consumer debt passed to Debt Collection Agencies (DCAs) or sold to Debt Buyers, which specialise in buying personal debt cheaply and then pursuing the individuals to pay up. The association said 32million debts were being pursued, an increase of 4million in the past six months. The growth in so-called payday loan firms, which offer short-term loans at high rates of interest, is one reason for the rise in people being chased for debts. The CSA said local councils, government departments and agencies were also taking a more aggressive approach by employing private debt collection agencies....Read more here--: Collection-firms-chasing-58bn-debt-figure-jumps-6bn-just-SIX-months
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Collection firms chasing £58bn of debt as figure jumps by £6bn in just SIX months
Debt collection agencies are chasing a staggering £58billion – equivalent to £1,000 for every man, woman and child in the country. The total has shot up by £6billion in just six months and demonstrates how ordinary Britons are unable to keep up with repayments on loans, credit cards and other finance. The figures make clear that a huge ‘debt bounty’ has been placed on the heads of thousands of individuals at a time when the economy is in double-dip recession. Some collection agencies involved have a reputation for being heavy-handed and threatening, bombarding people with telephone calls, letters and visits at home and work. In some cases, agencies are sending debtors photos of their own homes as a way of frightening them into paying up. Huge fees are often added to the original debt, making repayments even more difficult.
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Figures that show the full extent of outstanding consumer debt passed to Debt Collection Agencies (DCAs) or sold to Debt Buyers has been published for the first time by The Credit Services Association (CSA), the National Association for the UK debt collection industry. At the end of 2011, the total value of unpaid consumer debt held by CSA members for collection stood at £58 billion (£58.179bn), comprising £31 billion (£31.239bn) placed by creditors with DCAs to collect, and a further £27 billion (£26.940bn) of purchased debt owned by Debt Buyers.
The total volume (i.e. number) of consumer debts awaiting collection by CSA members now stands at a staggering 32 million (32,130mn) as at the end of December 2011 - the equivalent of at least one significant debt for every UK household or £1,000 of uncollected debt owed by every man, woman and child in the country. Six months earlier (H1 2011) the total value of unpaid consumer debt stood at £52 billion (£51.875bn) across 28 million (28,049mn) cases – so both the volume and the value of debts are rising, a fact that the CSA President Sara de Tute attributes to a range of different factors:...Read more here
Almost £60bn of unpaid consumer debt had been passed to debt collection agencies by the end of 2011, with government departments increasingly using agencies to recover outstanding money, according to the first set of figures published by the industry. The figure grew by £6bn in the second half of the year, and the Credit Services Association (CSA), the trade body for collection agencies which published the figure, said that the amount of outstanding debt had been steadily increasing in recent years. Most of the debt has been passed on by mainstream lenders, but utility companies and phone providers are also using debt collection agencies, as, increasingly, are government departments such as HMRC and the Treasury. The CSA said payday loan companies made up just "a smattering" of those lenders using the 90% of the industry it represents. A spokesman for the CSA said there had been "a cultural shift" which meant more government agencies were outsourcing debt collection. The CSA's president, Sara de Tute, said: "The economic environment has undoubtedly become more difficult and so it is no surprise that debts are rising.
"But there are also other reasons, including 'new' creditors within the private sector and parts of national government who no longer see an issue with outsourcing debt for collection to professional and highly regulated agencies capable of recovering monies vital to the public purse." She added: "The government has gone on record recently [as part of its Fraud, Error and Debt initiative – pdf] as reporting that overdue debts cost it between £7bn and £8bn – 95% of which resides with the Department of Work and Pensions and HMRC – and part of this has now been passed to our members for collection."....Read more here-: Source: Guardian Debt collection agencies are tracking down £60bn