Balancing post-lockdown enforcement with debtor vulnerabilities

The unique circumstances we now find ourselves in following the onslaught of COVID-19 is forcing our customers to think differently about revenue generation and collection. We are increasingly seeing press articles focussed on government funding shortfalls and council jobs at risk. The postponement of enforcement activity on Council debtors, whilst necessary to protect low income and vulnerable debtors has certainly not helped matters.

A press release from the StepChange Debt Charity notes that according to the Local Government Association over £500m of council tax has gone unpaid during the outbreak which potentially indicates over 1.3 million households face council tax arrears.

Facilitating a more compassionate approach to collection
As restrictions on enforcement and recovery action ease next month, now is an opportunity for a fundamental re-think on how Authorities can recover outstanding debt in a fair and compassionate way. We are already working with a number of Local Authorities and Enforcement Agencies operating on their behalf, implementing intelligent data driven technology to make this a reality.

A wealth of debtor data is already held by Councils, which when coupled alongside external financial data at an individual debtor level and consolidated together, reveals the true circumstances behind an individual’s ability to pay. Going way beyond a simple trace and collect approach this is a sophisticated, intelligent based way by which to direct the efforts of your recovery and enforcement team.

Detailed, unique debtor data to promote better understanding
Using credit reference and business intelligence data encompassing credit card balances, outstanding loans, mortgage values and addresses linked to individuals, provides a greater level of understanding about a debtor’s circumstances. This not only supports a more sympathetic and informed decision-making process when it comes to recovery, it focusses efforts on where quicker collection of debt is most likely.

Reducing debtor burden
Taking it a step further automated workflows and scorecard methodology built into the system can help direct specific debtors down a recovery path that best suits their ability to pay. Not only is it a valuable tool in identifying potentially vulnerable debtors, it assists in reducing any additional burdens placed on debtors who simply can’t afford to pay. Rather than adding on additional court and enforcement costs to vulnerable debtors, the system can be set up to route these cases to your vulnerability and customer care teams so that a proper dialogue can be held with debtors and a more effective repayment plan put in place.

Addressing long term debt
As well as addressing the immediate short-term debt built up in your Authority this same technology can also be applied to older debt which may span back a few years and has not been reviewed in some time. Circumstances of debtors change over the years and for cash-strapped Authorities it could provide a much-needed additional injection of revenue. It can effectively be used to identify those cases where an individual is now in a much stronger position to repay a long over-due debt without fear of them being financially stretched.

If you want to find out more about how Authorities and Enforcement Agencies are using  intelligent data driven debt collection technology contact or for more details.

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