By Dicky Davies, business development director, Lowell Group
The public sector’s record on collecting debt is relatively good but could it be better? Could a different approach to debt collection strengthen the finances of public sector organisations and possibly even offset the effects of spending cuts on frontline services.

There is certainly a wide range of public sector debt to tackle, everything from income tax, council tax, benefit overpayments, student loans and child support payments through to parking fines, library fines and unpaid TV licence fees.

Local authorities in England collected £21.9 billion in council taxes by the end of March 2011 out of £22.5 billion due, which is a 97.3% success rate and without doubt a good performance. But to put matters into perspective, that still left around £600 million council taxes unpaid!

In an effort to improve debt recovery performance, some Government departments and local authorities are already outsourcing elements of their debt collection to specialist agencies, typically on a conventional commission basis.  In fact HM Revenue & Customs recently signed a well-publicised deal with a number of debt collection agencies to collect £1.5billion of debt.

But are public sector organisations considering all of their options…and how do they go about choosing the right partner? There are current restrictions on selling debt but there are other options available to public sector organisations looking to maximise their debt recovery, including ‘Outsource to Sell’ and ‘Right to Collect’ – both offering ways to enjoy many of the benefits associated with selling debts without the full commitment of a sale and now both offered by Lowell, the UK’s leading debt purchase specialist.

Outsource to Sell/DCA Contingency Collections Services
In the anticipation that current restrictions on selling debt might be lifted within the foreseeable future, Lowell Group has recently launched a commission-based ‘outsource to sell’ debt recovery service specifically with the public sector in mind. Outsource to sell allows organisations to outsource accounts for collection on a commission basis initially, with the option to sell them to Lowell at a later date. It’s a chance for organisations to benefit from Lowell’s particular skills in collections and customer management without committing to debt sale.

Right to collect
With these agreements, legal ownership of the debts stays with the original creditor with the ‘purchaser’ being granted a licence to collect for a set period of time. As with debt sale, the original creditor realises value for the debt immediately rather than relying on an uncertain income spread over several years, so it improves cashflow. Also, for the period of the agreement the ‘purchaser’ takes responsibility for managing all queries on the account thus removing the relationship management costs from the seller. At the same time, this frees up in-house resources to be used more productively, for example by focusing more on recovering performing debt.

Experience, data usage and automated tracing
When choosing the right partner for your debt recovery three important things to consider are; how experienced the company is, how they access and use data and the efficiency and accuracy of their tracing. Lowell Group ticks all of these boxes. It was originated in 2004, has a strong track record, eight million customer accounts and a host of bespoke technology developed in-house – including its in-house automated tracing tool.

The Group’s significant customer base provides access to unrivalled data – in fact, if we don’t already have a relationship with your customers it’s highly likely that we’ll have some knowledge of them. We also offer an unrivalled in-house automated tracing tool. Developed to cross check and filter out as many data inaccuracies as possible, Lowell’s highly automated system combines complex logic with multiple data resources – both internal and external – to ensure ultimate confidence in the results. This is better for your business, as the automation delivers quicker results, but also better for the customer as we are able to deliver more accurate results.

Debt collection is a sensitive business and Lowell adheres fully to the stringent regulations and standards that apply to collections and ‘treating customers fairly’. Also, whilst we are not officially regulated by FSA, the clients we work with are so we aim to meet these standards across the board.

About Lowell Group
Lowell Group is widely regarded as the UK’s leading debt purchasing specialist and takes pride in its close transparent relationship with clients, fair treatment of customers, ethical approach to collections and reputation for excellent service.
Headquartered in Leeds, the Group employs more than 500 people across three state-of-the-art offices in Leeds and Preston.

For the last three years Lowell Group has been ranked number one in an index of all the leading credit management and debt collection businesses in the UK compiled by industry consultants OC&C. The index takes into account both past performance and future strategy.

Contact Lowell today to find a better way forward for your debt recovery.

For more information
Tel: 0113 285 6612
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www.lowell.co.uk