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Debt Collection

Experian report sets out recommendations for improving DCA performance

By CreditMan Thursday, June 3, 2010

Experian®, the global information services company, has published new analysis on the UK’s debt collection agency (DCA) industry and advice on how DCAs can better adapt to market conditions.

Experian’s ‘Debt collection in lean times’ report reveals that despite economic pressures in 2009 just over half of DCAs (52 per cent) grew their turnover during the year. While the majority of firms that improved turnover also expanded their employment, 18 per cent of DCAs managed to become more productive and deliver significant increases in turnover without a corresponding increase in employment.

In its report, Experian’s experts recommend that DCAs can better adapt to the economic climate by:
* Gaining competitive advantage through data insight. Making use of available credit, demographic and behavioural data to prioritise accounts according to risk and the likelihood of collections success.
* Cleansing contact data to get closer to debtors. Validating and updating customer data with the latest contact details will maximise right party contacts and minimise the time and effort wasted chasing wrong numbers.
* Integrating and automating collections activities. The ultimate operational goal must be seamless integration of all collections activities in a single architecture, ensuring that collection agents have access to accurate customer data and productivity tools to enable fast and accurate decisions. Modern systems use sophisticated process management and segmentation to automate many of the customer interactions, freeing up agents to concentrate on the more difficult cases.

Simon Waller, Head of Collections at Experian UK & Ireland, comments: “Although there was strong demand for DCA services during 2009, it was a challenging year for the DCA community. Despite this, those forward thinking DCAs finished 2009 financially stronger than they started it. These pockets of excellence demonstrate that investing in people, operations, data and systems can deliver significant substantial improvements in business performance.

“The most effective and efficient DCAs are able to finely segment their customers in order to understand the likely return on investment of each activity and to best identify where to focus expensive resource. By automating standard tasks, avoiding those destined to deliver no result and focusing people to interact in the most beneficial way with customers, DCAs can apply more effective treatments and achieve more efficient use of resources.”

Peter Wallwork, CEO, Credit Services Association & Debt Buyers and Sellers Group, comments: “Research is always welcomed and since specific details as regards the true ‘value’ of the collections industry are difficult to come by, we hope that this work will go some way to demonstrating the vital contribution that our members make to the economy, and the difficulties we face.

“This year will be a challenging one against a context of rising bankruptcies, increasing taxation, and the availability of less disposable income, and debts will undoubtedly become more difficult to collect. This research will show the steps that our industry is taking to improve the customer journey while still delivering the results our clients demand.”

To download a copy of Experian’s report please visit http://www.experian.co.uk/consumer-information/whitepaper-debt-collection-lean-times.html.

Read more at www.experian.co.uk/consumer-information/whitepaper-debt-collection-lean-times.html