Calls by Credit Association for Change in Legislation to Tackle UK Debt Crisis
October 03 2007
By Stephen Kiely, Ccrmagazine.co.uk
The UK debt collection industry is calling on the Government to tighten-up legislation that it claims allows people to simply ‘disappear off the radar’ and escape paying back their debts. In its first ever debt manifesto, the Credit Services Association (CSA) says that current regulations are in urgent need of a major overhaul if the Government is serious about tackling the UK’s escalating debt crisis.
Personal debt is rising by a staggering £1 million every four minutes and growing numbers of people are racking up huge debts and then moving address to evade paying them back. The CSA, which is the official body representing the UK debt collection industry, argues that current regulations concentrate too much on the rights of the consumer and not enough on their duties to fulfill their financial obligations.
In its manifesto, which aims ‘to enlighten, raise awareness and suggest proposals to alleviate problems caused by debt’, it also claims that the biggest problem impacting the recovery of debt is the rightful access to information about debtors who have willfully absconded or disappeared off the radar.
The CSA believes that there should be a legal requirement for individuals to register an address with their creditors, and inform creditors if they move on. It says this would protect the innocent from incidence of ‘mistraces’ that have been allowed to overshadow the real issue of certain debtors committing deliberate fraud or evasion.
Godfrey Lancashire, president of the CSA, says there is a clear relationship between a regulatory culture that enables consumers to avoid their debts and the growing problem of indebtedness, and he calls upon the Government to work more closely with the debt collection industry. Mr Lancashire said: “We need to stop seeing all debtors as victims and the collection agencies as the bad guys, when clearly neither should be described as such.
“The Government’s approach to regulation of the debt collection industry should recognise its positive aspects. It needs to maintain the right balance between enabling debt collectors to recover monies owed to UK Industry and the Public Sector without being hampered by excessively burdensome regulation, and providing the regulatory framework to protect consumers from bad practice.”