More companies than ever are using debt recovery agents

At the end of 2011 about £60bn of unpaid consumer debt had been passed over to debt collection groups with government departments also choosing to use debt collectors on an increasing basis in an effort to get outstanding money from citizens. Over the latter half of the year the figure increased by about £6bn more with the Credit Services Association stating that over the last few years the amount of outstanding debt continues to increase.

Mainstream lenders tend to pass on the debt but phone providers and utility companies are now seeking out help from debt collection agencies as are some of the most notable government departments such as the Treasury and HMRC.

The CSA stated that contrary to what people may think, payday loan companies and other questionable lenders only actually make up about a small percentage of the companies taking advantage of debt collection agencies.

A CSA spokesperson also stated that in the last few years there has been a cultural shift in who chooses to use debt collection aid with more government agencies choosing to outsource their own operations. President of the CSA, Sara de Tute added that this is likely due to the fact that the economic environment is getting tougher causing debts to increase across the board.

Tute continued to say that there are other reasons that such as the fact that creditors that are part of the government or in the private sector now accept the idea the outsourcing debt and this new comfort zone has helped lead to outsourcing debt collection to professional services. She also stated that the government is aware that overdue debts cost it between £7bn to £8bn every year and that if debt collection agencies can help reduce this figure then they are well worth the small cost.