UK ARM Firms See Record Debt Assigned in Second Quarter

Consumer debt passed to debt collection agencies (DCAs) or sold to debt buyers in the United Kingdom  has officially passed the £60 billion ($97.2 billion) figure for the first time, according to the latest quarterly statistics from the Credit Services Association (CSA), the official body representing the UK debt collection industry.

At the end of June 2012 (Q2 2012), the total value of unpaid consumer debt held by CSA members for collection stood at £61.4 billion ($99.5 billion), comprising £33.2 billion ($53.8 billion) placed by creditors with DCAs to collect, and a further £28.2 billion ($45.7 billion) of purchased debt owned by debt buyers.

This represents a significant year-over-year increase of 18 percent and an increase of 5 percent or from the first quarter of 2012.

The values of consumer debts actually collected have also increased. The total consumer debts collected in Q2 2012 stood at £472.4 million ($765.2 million), an increase of 23 percent compared to Q2 2011.

Sara de Tute, President of the CSA, says that the figures may suggest a number of different debt types and consumers being evident for the first time: “A typical debt portfolio might comprise a high number of comparatively small debts of the kind owed to utility companies, mobile phone companies, mail order companies etc,” she said.

“The trend towards a larger average balance for each debt could suggest that more customers within ‘middle England’ are falling into debt for the first time, and certainly this is a view that is shared anecdotally by some of our members.”

Regardless of who the debtor is, Sara says that the message from the debt collection industry is the same: “Never bury your head in the sand and think that the problem will go away,” she says. “Talk to our members, and engage with them. Only by creating a dialogue can we better understand your position and help you find a way out of your debt.”