The latest figures from the debt collection industry have revealed that there has been an increase in the number of first-time defaulters compared to previous years.
The head of the Credit Services Association has also urged ministers to introduce legislation, which would help to reduce the number of cases of mistaken identity.
The CSA has just released the statistics for the first quarter of 2012, which showed a marked decrease in debt collection payments between December 2011 and February 2012. However, by March 2012, approximately £172 million was collected, roughly the same amount before the seasonal dip occurred.
But the President of the CSA, Sara de Tute, admitted that many of the members of the body were describing a marked increase in the number of customers who had fallen into debt for the first time. She insisted that agencies were ‘working with’ households ‘…wherever possible,’ to try and agree upon a repayment programme.
The comments from the CSA were echoed by David Hawkes, from AdviceUK, a network of independent advice centres from all over the country. Mr Hawkes, the national money advice co-ordinator for the group, said that it was the poorest members of communities who were still having the greatest difficulties. But he added that many centres had noticed a surge in requests for help from more ‘affluent’ households, where debt has become a problem, including from those who own their own home.
The report from the CSA also once again called for a change in the law, which would provide debt collection agencies with access to the full electoral register – which they believe would eliminate the number of cases of mistaken identity. The group argued it is ‘not in anyone’s interest’ for the wrong individual to be chased for payment and said that providing them with the same access as banks and other lending organisations, would reduce the possibility significantly.