ARTICLE...
Introducing a Level Playing Field
Whatever industry you work in, regulation is a good thing. Everyone benefits when clearly defined rules, policies, procedures are in place. At the very worst end of the spectrum, they ensure minimum standards are maintained – ticking a box for compliance. But, at best, when used to their maximum potential, businesses can see a huge, positive impact on their business – helping them to attain the very highest standards at all times.
Of course, in the credit services sector, we know the rules and regulations we must always follow. More importantly, we all know the penalty for a failure in compliance – the loss of our consumer licence and the potential loss of our businesses. But talking about 'credit services' and 'collections' is tricky and we tend to run into a number of challenges. Why? Well, because we're not all competing on a level playing field.
Let's take a look at an example. Collections undertaken by a local authority might outwardly look similar to our own activities. They are, essentially, collecting and recovering cash – either from council tax, arrears or outstanding rent from a lock-up. And they use the same kinds of techniques – letters, then phone calls and then a personal visit from a bailiff.
So, if they work the same way you'd expect them to be regulated in the same way too, right? Wrong! While there are certain rules which councils must adhere, they are not classed as 'businesses' and so don't need a consumer licence. This means they don't follow the same rules as others doing almost exactly the same role. Most importantly, by definition they can't have their licences revoked!
Complaints, when raised by the media, don't look too far either. They'll lump together a collections agency, a local authority and a bailiff – whether they're legitimate or otherwise. Everyone is labelled a 'debt collector' regardless. The professional collections industry – despite being one of the most sophisticated and highly regulated parts of the financial services sector – is not seen as anything other than the stereotype. Commentators also fail to acknowledge how the CSA's members are used by central government and all the major granters of credit – and are tasked with completing work that is both confidential and highly sensitive.
Perhaps more than ever we need to make the call for having one industry, signed up to one code and answerable to just one regulator. Then we might be able to see the wood for the trees.
Original article courtesy of DBSG.
