COVID-19 creating capacity crunch for creditors – TDX Group comments

Carlos Osorio, Director of UK Debt Recovery at TDX Group, an Equifax company, believes a consumer debt bubble is building in the UK and creditors need to prepare before problems arise:

The current pandemic has had a damaging impact on many people’s finances. The pausing of different areas of debt collection and enforcement has provided a temporary solution, but without immediate action to address the looming bottleneck, it’s very likely creditors will struggle to cope with the increased volumes of customers in need of urgent help once collections resume.

While the temporary cessation of debt collection activity, across both the public and private sectors, did provide some much needed breathing space, it doesn’t address the core problem of whether people will be able to pay when collections restart. The can has been kicked down the road, and creditors need to plan for the expected surge in activity.

The key issue will be how to scale up their staffing capacity quickly enough to prepare for the elevated workload in their collections teams. With offices and call centres requiring social distancing measures, the task of increasing staffing and training becomes much more complicated and costly. Problems that lie ahead include long wait times into the contact centre and perhaps less effective interaction with customers who need help.

This will impact the standard of collections activity at the very time when customers need fast and empathetic support. Creditors must put in place sufficient capacity and shouldn’t wait until collections start to resume, otherwise they may simply increase the pressure and stress on already financially vulnerable customers.

Carlos Osorio, TDX Group
Carlos Osorio, Director of Debt Recovery.