It’s starting to feel to me that the commercial pressure of funding debt advice means there is probably going to be one too many organisations in the service delivery chain for some streams of debt. For years we have been signposting customers to independent free debt advice, as we of course ‘can’t give advice’. Yet the pressure on Fair Share contributions to support debt advice, combined with what’s right for customers and commercial entities making a profit appear on a collision course. Already in the market there are pre DCA ‘debt advice agency’ strategies which are driven by a desire of cleansing the portfolio to de-risk the outsourcing strategy rather than saving on Fair Share contributions. However as some of the debt advice agencies continue to build infrastructure and capability, and invest in technology with self serve and open banking leading on that investment, we could see a change in outsourcing strategies with a focus on identifying approaches for those customers that need help in managing their finances, rather than those avoiding paying a debt for whatever reason. I don’t see any of this as bad, just a potential change in the landscape ahead for us all that we will all need to respond to.
But there also needs to be a root and branch review of how debt advice is delivered and whether consolidating and therefore simplifying those activities will deliver a better, more cost-effective and more sustainable service to the consumer. We remain committed to working with the regulator, the MAS and the debt advice sector in finding a fair, workable and sustainable long-term funding solution.”
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