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Legislation & Litigation

FCA pressure leads to surge in hiring of white collar collections and recoveries staff as standards tighten

By CreditMan Tuesday, September 16, 2014

Demand for highly-skilled debt collection and recoveries specialists has surged by 56% in the last year, triggered by increased pressure from the FCA for businesses to improve their standards in this area, according to BrightPool, the specialist financial services recruiter.

BrightPool says that a major shift in the last year towards professionalising the collections and recoveries sector has led firms to overhaul their teams, with much more demand for compliance, analytics and other management roles.

BrightPool says that there are now approximately 15,000 debt collection and recoveries specialists working in the UK, having expanded rapidly in the last year.

BrightPool explains that partly due to FCA pressure, firms are now looking at ways of recovering bad debts in more ethical and sensitive ways, with many firms investing heavily to improve both customer service and their internal compliance systems.

As a result of the surge in demand for senior expertise in this area, BrightPool says that rates for collections and recovery compliance specialists at a manager level has increased by 21% to £450/per day and permanent salaries up to £65,000 base salary + bonus for Collections managers managing teams. Temporary Collections Advisers have also seen an increase in day rates by up to 26% to day rates of £180/ day for experienced staff and 8% on base salaries for permanent staff with salaries topping mid- high 20's.

On April 1st 2014 the FCA took over the regulation of consumer credit businesses from the Office of Fair Trading. This means that payday lenders, non-bank lenders and other outsourced providers of debt collection services are accountable to the FCA’s regulation of consumer credit.

BrightPool explains that firms that carry out regulated consumer credit activities have had to increase their staffing to build up and professionalise their collection and recovery services to meet the FCA’s tougher approach to supervision.

Angela Hickmore, Managing Director at BrightPool, comments: “The FCA have issued a stark warning to businesses in consumer credit – get your collection standards up to par or risk regulatory action. Many firms across the consumer credit sector are rapidly overhauling their collections and recoveries teams in response to the more rigorous enforcement of standards by the FCA.”

“There is a big shift taking place, with firms professionalising their standards by implementing new systems and controls and making sure there is a clear audit trail to document their approach to a recovery. The FCA has made it clear that firms need to be able to provide evidence that they are treating all their customers fairly and firms are responding by investing heavily in the debt recovery teams.”

“Doing the job properly is more labour and technology intensive, but it delivers higher returns and better customer satisfaction.”

“The debt collection and recoveries sector has already moved a long way from its old reputation of strong arm tactics. For the more progressive operators the collections business is more about offering payment plans and using analytical software to identify which customers can actually afford to pay their bills.”

“Collections will remain a focus for the FCA, especially in light of recent claims about how some firms are handling the collection of debt.”

In June, Wonga was forced to pay £2.6 million in compensation by the FCA after sending threatening letters from non-existent law firms to customers in arrears. At the same time, it also emerged that some firms sent letters to customers which gave the customer the incorrect impression that the debt had been escalated to a third party.

Growth in unsecured lending products also driving hiring increase

BrightPool says that the challenger banks are also hiring heavily to build their collections and recoveries teams. This is because they are rapidly expanding their unsecured lending products, which need proactive monitoring by a well-staffed collections team.

Angela Hickmore explains, “The challenger banks are being very proactive in bringing a large range of new unsecured lending products to market. This growth needs to be supported by a highly professional collections and recoveries team to prevent bad non-performing loans from souring higher.”

BrightPool adds that both HMRC and the local authorities have been outsourcing more of their collections and recovery work to the private sector, which is increasing demand for collections staff.

About BrightPool

BrightPool is a leading provider of talent pools of employees for regulated businesses across the financial services sector, as well as telecommunications companies, energy, and other utility businesses.

BrightPool delivers both handpicked specialist teams and large scale programmes of work, planning, managing and implementing major recruitment projects of between 5-200 people.

BrightPool has developed a comprehensive methodology for rapidly recruiting large scale teams of employees for customer focussed organisations, specialising in areas such as regulation, remediation, collections, change & transformation, sales teams and other operational requirements.

BrightPool’s clients include many of the largest regulated companies, outsourcers, and management consultancies & professional service firms. BrightPool provides teams with an extremely low attrition rate and with high levels of customer satisfaction.

Source - Brightpool press release