ARTICLE...
A Missing Link
Data quality is one of the greatest challenges facing the debt sale sector, but it also presents perhaps the greatest opportunity.
If handled correctly, we can ensure we contact the right customer in the right way at the right time, saving innocent consumers the distress of mistrace, helping the vulnerable, while still adhering to all the relevant regulations.
Of course it will save the industry the huge cost of speculative tracing using partial information but will also ensure that those who wish to improperly evade their obligations can be identified and distinguished from the 'can't pay' consumer who genuinely needs our assistance.
All this may sound good, but what is data quality and how can we improve it? Well, it comes down to two things – availability and accuracy.
This is about lobbying to ensure that properly accredited users have access to all data necessary to find and assess the circumstances of their account holders. Such access should include the full electoral roll, the national change of address registry, and of course access to white (positive) credit reference data whenever we are acting as an agent, or as part of the pre-purchase process for buyers.
It is plain folly that full customer data can be used to help people get into debt, but not to help them get out of over-indebtedness.
The proposed reduction of the statute of limitation to three years would almost inevitably lead to credit records being deleted after three years, creating a landslide of litigation toward the end of the limitation period. Such a change seems to me to go against natural justice, and of course all consumers would have to share the cost of such ill-judged proposals. The good news is that the recent MoJ consultation has resulted in a tumult of responses from the industry.
Everyone can and must play their part here. Accuracy stats with the original creditor, who must ensure accurate updates are supplied to the credit reference agencies, and that ad hoc requests and corrections from agents and consumers are processed in a timely fashion. Accurate information must also be provided as part of any debt sale, particularly in complying with Consumer Credit Act statement requirements.
The next link in the chain is the credit reference agencies, who must ensure that processes and algorithms are in place to eradicate incorrect links, and that clients are held to account for any breaches of their data sharing agreements. Significant progress is being made, and all the agencies are cooperating with the DBSG and SCOR to promote data accuracy. But for the future, would it be too much to ask for the reference agencies to conduct an ongoing reconciliation of their respective databases? This kind of industry-wide initiative could easily lead to a reliable confidence level flag on positive traces, and a reduction in false links within the data.
Finally, all buyers and collection agents need to use the credit data responsibly, conforming to SCOR principles, contributing fully and updating only positive traces, so that false links do not proliferate.
So how can we try to improve data quality within debt sale? As part of the DBSG, feel fortunate to be part of a group with a unique range of members, from major creditors and funders, through credit reference agencies and intermediaries, to a wide range of buyers. This unique constituency has allowed us to work together on issues such as data quality, and we have now formed a Data Quality Working Party specifically to address many of the challenges. Gillian Key-Vice of Experian has agreed to head up the working party, while Andrew Bartle of Lowell Group will continue to represent BSG on SCOR.
Over the last 18 months, CSA and DBSG have been steadily improving relationships with government and the regulators, and we will now be engaging further with all stakeholders in debt sale to ensure quality of data is improved throughout the credit chain. The benefits of such a step are clear, as are the consequences of inaction in terms of further regulation and media attention. The choice is ours.
Original article by Leigh Berkley, courtesy of Credit Today.
