Effect of Credit Crunch on DCA's behaviour - Will it mean they leave 'small fry' debtors alone?

[sallykerol]

I'm just wondering and I did do a search on here yesterday but found no mention of this.

 

Because of the current economic problems in Britain and because so many people are in so much debt - bankruptcys, losing houses etc, does this mean that the debt collection agencies might concentrate less on the small debtors?

 

By small debtors I mean stuff like credit cards say under 2000 pounds.

 

Or will it go the other way and make them even more aggressive towards smaller debtors because they think they have a better chance of getting money out of them than someone who has just had their house repossessed.

 

Has any any ideas on this.

Thanks

[NailPost]

No, if something it'll be the other way round. Banks and credit card companies and the like will be keener than ever to make some sort of money from whatever they have. They can write off bad debts against tax and they can get a few pennies in the pound from selling on the bad debts to the likes of Cabot. They will then pass them onto smaller firms to try their luck. The plans are unlikely to work unless the paperwork is in order.....

[sallykerol]

No, if something it'll be the other way round. Banks and credit card companies and the like will be keener than ever to make some sort of money from whatever they have. They can write off bad debts against tax and they can get a few pennies in the pound from selling on the bad debts to the likes of Cabot. They will then pass them onto smaller firms to try their luck. The plans are unlikely to work unless the paperwork is in order.....

Hi there

Thanks for answering but... um

I'm not asking about bank or credit card company behaviour.

As I said in the title and opening post I am specifically referring NOT to them but to Debt Collection Agency Behaviour.

[rory32]

DCA's prey on the vunerable. The size of the debt to a large extent is immaterial as they work on commission - easily collect on a lot of small debts by bullying people into paying (whether they can afford to or not and indeed in some instances whether it is their debt or not) and it adds up to a healthy commission.

 

IMO the credit crunch will have very little effect on their behaviour. The only thing that will effect their behaviour is people being aware of their legal rights and what DCA's can and can't do as well of course reporting them to the regulatory authorities.

[stardust_john]

Heared company I dont recognise on local radio stating business was good. They were asked dont you feel for the people who cant pay rather than wont pay and she said no (we dissacociate ourselves) or along that line of chant. She did moan at how people considered it ok to list a sky subscription as an outgoing and I thought oops I have sky. Lovely:mad:

[cashins]

IMO only 2 things would really effect DCA's.

 

Proper regulation

 

Debt collecting became unprofitable.

 

The problem is, their behavior is so ingrained. This is self evident in cases where even the thickest customer advisor/supervisor must realise that they are wasting their time, but the machine still grinds on with a life of it's own.

 

David

[dpick]

My opinion is the credit crunch means more people in debt more people for these gutter scrapers to pray on.

 

dpick

[zazen.warrior]

I think they may well leave the more 'aware' alleged debtors alone and give preferance to the droves of more vulnerable people coming along, after all what drives them is easy profits and we caggers must be quite a drain.

[Pinky69]

I read in Credit Today over the Summer that 43% of DCAs are having a hard time and that in the course of the next 12 months some will fold and some will amalgamate with other companies. They are not getting it all their own way and the credit crunch is throwing up a new generation of debtors some of whom have powerful legal connections and won't put up with any snash. I don't think they will stop pursuing smaller debts - I think what determines their behaviour is the level of resistance they meet when they are knowingly pursuing a debt unlawfully. Some stick it out for a while but in my own case I was amazed at how quickly some of them just folded.

[zazen.warrior]

Yes, I've got rid of a DCA with just one letter more than once

[cashins]

I read in Credit Today over the Summer that 43% of DCAs are having a hard time and that in the course of the next 12 months some will fold and some will amalgamate with other companies.

 

That doesn't suprise me.

 

They're in it for easy pickings but when you see the mind boggling incompetence some display, you have to wonder if it extends to their business administration.

 

David

[sallykerol]

I read in Credit Today over the Summer that 43% of DCAs are having a hard time and that in the course of the next 12 months some will fold and some will amalgamate with other companies. They are not getting it all their own way and the credit crunch is throwing up a new generation of debtors some of whom have powerful legal connections and won't put up with any snash. I don't think they will stop pursuing smaller debts - I think what determines their behaviour is the level of resistance they meet when they are knowingly pursuing a debt unlawfully. Some stick it out for a while but in my own case I was amazed at how quickly some of them just folded.

Firstly, thanks for all the replies. Sadly it wasn't what I wanted to hear.

Oh well

So Pinky69 when you say 'the level of resistance they meet' does that include just ignoring them for three years?

..............Or maybe not. See the way I see it if I can stick it for another three years.

Then I'm free.

[propjoe]

dca's buy debt for a fraction of the cost off banks

 

find it hard to believe they are feeling the pinch.

 

there again they couldn't run a bath never mind a buisness so it is believable after all.

 

[ScarletPimpernel]

I predict that the DCAs will suffer too.

 

DCAs who buy debt borrow the money to buy it: because of the credit crunch that money is now both more expensive to borrow and more difficult to source. Additionally, as people have less disposable income they will focus on their priority debt, making old, possibly unenforceable debt even harder to collect.

 

As lenders make it harder to borrow money, there'll be fewer consumers to default.

 

The biggest problem they'll face, I suspect, is that the debt industry will find themselves more tightly regulated. This wretched Zanu-New Labour government is already deeply unpopular, and they won't hesitate to take action in the short-term against an industry that is even less popular than they are if they think it'll help pull them out of the mire. They've already talked about making repossession harder.

 

When it comes to election time, what better target for a party than the unsavoury creatures of the debt-collecting world?