Wednesday, 28 September 2011

Debt management never looked so good

For those who feel that free advice may not be for them, it is important to be sure of a reputable company that sets and sticks to professional standards. But where are they? 

 Emma Bryn-Jones reports on her day at the annual DRF Conference. The Debt Resolution Forum is one of two professional associations for debt management companies (the other is DEMSA), and has been opening its doors to the wider communities of advice, collections and insolvency practice for some time. 

The Office of Fair Trading were there, The Insolvency Service, the Money Advice Liaison Group, the Money Advice Trust, Advice UK, DEMSA board members, countless banks, collections agencies, insolvency practitioners, technology specialists and a room full of professional debt management companies.

You’d be forgiven for thinking there’d be a show-down - money-grabbers brought to heel, so to speak. But the DRF were having none of it, for here was a group of people so far beyond basic housekeeping that their conference oozed hope and a new era of transparency and co-operation.

Perhaps, like so many British companies, commercial debt professionals are realizing that corporate social responsibility is so much more than a list of charities to which they donate, and are putting the relationship back into relationship marketing. We should hear them out, at least.

When the Insolvency Service talked openly about working within a remit for small government, there were parallels with the not-for-profit forums I've attended – how do we work smarter, achieve more for less and if the government will not legislate, are we able to self-regulate towards a common protocol? 

The Debt Advisor even suggested sharing investments in new technology with the free to client sector. Who’d have thought that a fee charger would want to help those uncertain of funding? And with not a mainstream journalist in sight, it was hard not to believe the offer was genuine.

When collections agencies complained about up-front fees, there was a kerfuffle – livelihoods depend on this – and I guess if you accept that free or paid, every advisor needs a salary, you can see why. Even so, talk of alternative payments ensued, a desire to offer the best deal, clearly genuine. 

With consumer interests to the fore, DebtWizard questioned how debts are sold on for a fraction of their value, yet debtors are still chased for the full amount. You’d have thought this would send the creditors and collectors packing, but far from it - an ethos of collaboration transfixed the room.

I found my own prejudices challenged. Nottingham based AMS Debt Doctor is direct and outspoken, fiercely defensive and, for some, a little too ready to question the status quo. They have just signed up to a comprehensive programme of the Edexcel CertDR training, showing commitment to a recognisable standard. 

On my journey home with the DRF Adviser of the Year, I was struck how a hairy rocker could talk so eloquently and passionately about customer service. I understood why it felt a bit like a vicar winning the Church raffle, when Cleardebt’s own David Mond presented his employee with this prize. Even industry leader, Paymex, laughed off the odd jibe.

Of course, grumbles emerged. People who have invested heavily in an ideology or a business model will always be fiercely protective of their achievements. It will take time before we see the fee chargers and free providers agree a level playing field, but there is most certainly hope that the OFT’s vision of transparency is coming.

So where does this leave the consumer? Far from the melodrama of boo to the baddies and hurrah for the good, the days of charlatan barbers hacking off pounds of flesh to recover your debts are numbered. Yes, there are scam artists, who thrive on the immediacy of the Internet, and we may never catch them all, but by working smart, we may not have to. 

As dialogue progresses, expect to see common principles, new technologies, specialist niches, social enterprise, free to fee hybrids and joint initiatives to tackle social exclusion. Look out for organisations that subscribe to the high standards set out by the Money Advice Trust, R3, the DRF and DEMSA and if they ain’t listed, don’t go there.


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