Client Newsletter December 2022

To our client newsletter and to all new clients that have recently come on board. Please read on for our Christmas opening hours, an update from the recent CSA conference and the cost of living crisis, along with a recap of a couple of our services.

Royal Mail First Class last posting date: Thursday 22nd December.
LRC last date for letters and calls to debtors: Thursday 22nd December.

Christmas Opening Hours

• Friday 23^rd December – OPEN
• Saturday 24^th/Sunday 25^th December – CLOSED
• Monday 26^th December – CLOSED
• Tuesday 27^th December – CLOSED
• Wednesday 28^th December – CLOSED
• Thursday 29^th December – OPEN
• Friday 30^th December – OPEN
• Saturday 31^st December New Year’s Eve – CLOSED
• Sunday 1^st / Monday 2^nd January – CLOSED
• Tuesday 3^rd January – OPEN

Please Note: The County Court Bulk Centre will be closed 26/27/28th Dec 2022 & 2nd Jan 2023.

With the current economic climate it would be wise to review your ledgers and send over any late payers to us sooner rather than later, the fresher debt the easier in theory it should be to collect.

We can offer Credit Control Services as well as Debt Recovery Services, so please do get in touch if you need help with this.

Please review any outstanding instructions regularly. Delays in providing us with them has an impact on our liquidation rates for you. If you need help or advice with any of your cases in order to progress matters, please email clientservices@legalrecoveries.com with the cases in question and ask for advice. At a minimum if you can action any payment offers or urgent cases this would help us both greatly!

Our Operations Team are reporting that debtors are starting to talk about the cost of living crisis on calls. We encourage discussion without pressure when speaking to your customers to obtain payments and payment arrangements to ensure we comply with the CSA code of practice. We do also ask you to be realistic when it comes to accepting payment arrangements, if the debtor has proved their income and expenditure it is recommended where possible to accept their offer.

At the CSA’s recent UK Credit & Collections Conference in Manchester there was much talk about the cost of living issues facing consumers, though these pressures were mostly anticipated to begin squeezing repayment rates as the winter months draw on and extra heating needs are accompanied by highly inflated energy bills. What few anticipated was that the change of administration to the Truss/Kwarteng leadership would be so quickly accompanied by a series of fiscal commitments that upset the gilt bond markets, putting even further upward pressure on mortgage and Bank of England interest rates. We are now in a position where, while the state will subsidise household energy costs to a very large degree, consumers look set to still face significant rising costs accompanied by higher personal finance and housing costs. With a typical two-year fixed mortgage now knocking on six percent, this is predicted to absorb 27% of household incomes as opposed to around 17% housing costs that most have been used to in recent times. In other words, the squeeze on available income after accounting for essential expenditure is still set to get worse in the coming year – which in turn will raise the number of households in deficit budgets and make the collections challenge harder still.

We can therefore anticipate a difficult economic climate in which UK consumers will continue to borrow but if we have now moved past the era of ultra-low interest rates, which seems likely even if the Government calms the markets somewhat, then default rates are likely to increase and the attention of policy-makers and the media on finance costs and forbearance needs will also increase. All the more reason, then, for the collections sector to maintain the creditable progress made over recent years in engaging professionally with customers, upholding high standards and working with creditors to maintain credit availability by helping lenders recover sums owed.

Public perceptions will continue to play a large part in the reputational standing of the collections sector – something that regulators and the Government will monitor closely. If the cost of credit is going to be increasingly under the spotlight, it is imperative that the wider public understand that collections isn’t something done for the sake of it, but is a necessary part of the process of maintaining ongoing credit facilities at affordable levels for as many people as possible.

Fortunately, the evidence suggests that the numbers of people who ‘get it’ far exceed those who do not believe that collections is a necessary function. The Credit Services Association commissioned pollsters Opinium in the summer and asked a nationally representative sample whether they agreed or disagreed with the statement that “It is reasonable for people who miss payments on the money they owe to be contacted by a debt collection agency”. By a ratio of more than two to one, 42% felt this was in indeed ‘reasonable’ versus only 20% who felt it was ‘unreasonable’, which leaves a sizeable remaining section of the population unsure. This suggests that, while further financial education is always important in sharing with the public how the financial services cycle operates, we have strong grounds for optimism that more people understand why debt collection agencies must exist than those who do not.

Did you know our in-house lawyer can undertake fixed fee case reviews? If you have a case where you need to understand your prospects of success in terms of the agreement / contract in place and any known disputes, we can advise you as to the likely costs of Court action, highlight any potential issues and give you advice on the best course of action, which may be to proceed with pre-action communications with a view to the issue of Court proceedings, insolvency proceedings or mediation. These are especially worthwhile on the high debt value cases.

If you need a reminder of your log in details or you or your team would like some training on the system, please let us know.

If you would like to have a review on Teams or in person, please let us know, this can be helpful to review the overall performance of your cases and is a good opportunity to ask any questions, or iron out any issues. We can also make recommendations for automated authorities to help us to work your files in a speedier way.

Please review your debts and refer them over to us as soon as possible, the fresher the debt, generally the easier it is to collect. If you need any assistance with this please let us know.

Good or bad we want to know! Please contact the client services team if you have any.

Lastly, we hope you have a great Christmas and New Year. Thank you for your continued business through out 2022!

Kind regards
Client Services

Rachel Rowbotham (Operations Director) Mobile: 07985 725688
Andrea Nicholls (Client Services Manager) Mobile: 07917 367081

Legal recoveries & Collections Ltd
www.legalrecoveries.com | E: clientservices@legalrecoveries.com | Tel: 0330024 6343