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creditor
August 17 2020

Debt management firm warns creditors to prepare for surge in activity

Michael Lloyd Industry News, News, Personal Finance News, Top 3 Carlos Osorio, Equifax, TDX Group

Debt management company TDX Group has claimed creditors need to prepare for an expected surge in activity from consumers suffering from problems with their finances due to Covid-19.

Carlos Osorio, director of UK debt recovery at Equifax firm TDX Group, said the pausing of different areas of debt collection and enforcement has only provided a temporary solution.

Without planning for a rise in the number of consumers needing help when collections continue, creditors will likely struggle to cope, Osorio added.

Read more: City watchdog urged to extend support for struggling households until 2021

Read more: Personal insolvencies ‘set for rapid rise’ in fourth quarter as payment breaks end

“While the temporary cessation of debt collection activity, across both the public and private sectors, did provide some much-needed breathing space, it doesn’t address the core problem of whether people will be able to pay when collections restart,” Osorio said.

“The can has been kicked down the road, and creditors need to plan for the expected surge in activity.

“The key issue will be how to scale up their staffing capacity quickly enough to prepare for the elevated workload in their collections teams.

“With offices and call centres requiring social distancing measures, the task of increasing staffing and training becomes much more complicated and costly. Problems that lie ahead include long wait times into the contact centre and perhaps less effective interaction with customers who need help.

“This will impact the standard of collections activity at the very time when customers need fast and empathetic support.

“Creditors must put in place sufficient capacity and shouldn’t wait until collections start to resume, otherwise they may simply increase the pressure and stress on already financially vulnerable customers.”

Read more: Government urged to take action on lockdown late payments

 

BondMason says closure of P2P service has proved a good decision for clients Growth Street reduces borrowers by a fifth as loanbook wind-down continues

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