According to astonishing recent news, debt collection firms have seen a significant decline in business since the beginning of the credit crunch. Figures show they have experienced between a 25% and a 30% drop in business over the last few years.
Most people would think that bailiffs would have benefited from the economic downturn, but with increasing numbers of people being made redundant, many people are keeping a close eye on their outgoings.
In a shocking revelation, the head of one of Britain’s leading debt recovery organisations, bailiffs have been unlikely victims of the recession.
Jamie Waller, founder and managing director of JBW Group, said that their lack of business at the moment is due to people being more financially conscious and seeking advice on their debts before their situation becomes serious.
He told the Daily Mail newspaper: “People are taking a more careful approach to their finances since the recession started. It’s had the reverse effect, which has left many bailiff companies overstaffed.”
The Enforcement Services Association, the bailiff trade body, confirmed that the recession was affecting their business, stating that the volume of debt referred for collection has dropped 10% compared to last year’s figures.
With the state of the current economy, debt is discussed much more often and people do not feel the need to conceal their struggle or brush financial problems under the carpet. The more publicity the credit crunch receives, the more likely people are to admit they are having financial difficulty. Thus meaning, they are more likely to seek advice and assistance with those problems before debt collection agencies have a chance to knock at their doors.
Confirming that consumers have become more finance conscious, Waller added: “We are now seeing that 60% are paying up after receiving only a letter.”
In past years, many people who had credit would wait for a final notice before making a contribution toward their debt, but now people are worried for their future. Many people fear for their jobs as redundancy is rife, and do not want to make any hasty decisions when it comes to borrowing money. The recession has caused people to think twice about accumulating debts that they cannot repay.
Recent figures also show that more bailiffs are dealing with debts  over the telephone instead of turning up on debtors’ doorsteps. This is likely due to lenders being more relaxed about calling in money owed to them. Also another factor is that the Bank Of England Base Rate is at an all-time low of 0.5%, meaning less people are falling behind on their mortgage payments. This in turn is creating less debt for the bailiffs to chase, which is bad news for debt recovery businesses, but no doubt a comforting thought to debtors!
Written by Katie Simpson ©