In August, a report was released which looked into levels of UK household debt. The study examined official figures from the Bank of England and the Office for National Statistics and also included wider financial “debt data” from UK banks, building societies, mortgage arrears, repossessions, consumer insolvencies and other lenders.
Conducted by financial research company, Verum, the findings revealed both a stark picture of the UK’s current “debt crisis” and warned of a bleak future dominated by a debt-threatened economy. Specifically, the research found:
- UK household debt rose by 314% from 1990 to 2013 and now stands at £1.4bn
- Personal debt is highest among those aged between 35-44
Taken in isolation these figures are clearly cause for alarm, but what is particularly concerning is that they have been released at a time of unprecedented low interest rates. The report goes on to state that even a small increase in the interest rate would increase the debt burden among UK households so much, that it would place many more families at risk of insolvency and bankruptcy, with many not being able to afford their mortgage repayments.
With so many at risk of falling into financial difficulties through unsustainable repayment plans, the size and make-up of the consumer debt collection industry and how it operates with regards to consumers’ concerns and needs has grown and, naturally, come further into the spotlight.
a new qualification to support professionalism in the consumer debt collection industry in partnership with leading financial providers and industry practitioners
In recognition of this trend, the way in which the debt collection industry is regulated has changed. From April 2014 regulatory responsibility for the industry was shifted from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA), who has been tasked with developing a more consumer-centric approach to the industry as a whole and tightening the practices and procedures of those who work within it.
With that in mind, ifs University College, in its role as the “University for Financial Education” has launched a new qualification to support professionalism in the consumer debt collection industry in partnership with leading financial providers and industry practitioners – the Certificate in Consumer Debt Collection (CertDC).
CertDC is designed to assist the debt collection industry in meeting its regulatory objectives and achieving the best consumer outcomes. Specifically this includes helping professionals understand the concept of debt collection, the obligations and responsibilities they have working within debt collection departments, understand the FCA regulation and the development of interpersonal skills that are required for the every day role of the debt collection professional.
Alongside this, the new qualification covers the FCA principles for debt collection, current regulatory guidelines and an overview of the debt collection environment as a whole. It also examines methods to improve customer interactions and outcomes, including client communication, trust and relationships and the principles and practice of appropriate market conduct.
The qualification has been designed with career progression in mind. Those successfully completing the qualification are ideally placed to broaden their skillsets through additional qualifications in retail banking through both the Certificate (CertRBCB®) and Diploma (DipRBCB®) in Retail Banking Conduct of Business.
Commenting on the launch of the new CertDC qualification, Martin Day, Vice Principal and Head of Faculty: Banking, Finance & Regulation at ifs University College said:
“The growth in consumer debt and changes in the regulatory environment have resulted in a need for a new qualification which addresses the key legislative standards and the essential skills for professionals working in consumer debt collection.
“CertDC is the only qualification available that reflects the main themes of the FCA regulation around improved collector training. It enables professionals to deliver better debt advice and to tailor solutions to individual circumstances more effectively. Ultimately this will improve client/provider dialogue and lead to a more consumer-focused industry.”
With a seemingly inevitable rise in the interest rate expected in the future, it is clear that the issue of personal debt and the debt collection industry will remain at the forefront of many UK households’ concerns. While the development and roll-out of professional qualifications such as CertDC will not cure all of the industry’s ills, or indeed the wider problem of a debt-fuelled economy, it will lead to a more professionalised, flexible and ultimately mutually beneficial consumer debt collection industry for both consumer and lender alike.