The global recession, banking crisis and steady decline in UK household disposable income has led to dramatic changes for lenders. On top of this, a fast changing regulatory environment has led to a situation where creditors and DCAs have to fast re-think strategies in order to continue to be able to provide products which are both attractive and affordable. The drastically altered compliance landscape creates enough changes itself, yet when combined with the differences in spending and lifestyle which have emerged over the past decade things are looking very different indeed.

Collection rate delivery, which many would expect to slow during the economic crisis, actually improved after an initial decline when compared to the 2006 benchmark on prime unsecured banking portfolios placed with Wescot. This denotes a trend of improvement which may in part be related to an improvement in lending practices which has necessarily occurred due to the banking crisis, yet there are also other factors at play. Figures from 2012 show that initial three month break-in rates have declined yet once stock begins paying, underlying collections performance improves by nearly 20%. This creates a combined upturn of 15% or more.

Break-in rates are a reflection of the level of contact achieved with the customer. Companies like Wescot have been focusing on adjusting strategies in order to increase the amount of customer contact achieved, engaging wherever possible and beginning the necessary dialogue to create an appropriate and affordable payment plan which takes into account individual circumstances. Advances in technology offer increased opportunities for data cleansing to ensure that contact details are accurate and up to date and those previous bad practices in the debt recovery sector such as door-step, excessive dialling, overly aggressive letters and inappropriate tracing activity are not only unused but also unnecessary. Investment across the board in both technological improvements and analytical capability drastically increases the level of customer engagement at an earlier stage of the recovery process, making it easier to find a solution which works for all involved parties.

Wescot operates as an ethical debt collection agency, not only working well within the constrictions of the new regulatory environment but in many cases leading the way in setting compliance standards across the industry. These compliance standards have been officially recognised by both Trading Standards and the Lending Standards Board.