UK consumer debt passed to DCAs exceeds £60 billion by Sara de Tute, President, CSA on 18-Sep-2012

Consumer debt passed to Debt Collection Agencies (DCAs) or sold to Debt Buyers has officially passed the £60 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, comprising £33.2 billion placed by creditors with DCAs to collect and a further £28.2 billion of purchased debt owned by Debt Buyers.

This represents a significant year-on-year increase of 18% or £9.5 billion (Q2 2011 £51.9 billion) and an increase of 5% or £3 Billion on Q1 2012 (£58.3 billion).

While the gross totals have increased, so too have the individual balances. The average individual account balance rose to £1189 at the end of Q2 2012 (£1133 Q1 2012) - the highest value ever recorded by the CSA. It follows almost precisely a US trend recently reported by the Federal Reserve Bank of New York.

The values of consumer debts actually collected have similarly risen. The total consumer debts collected in Q2 2012 stood at £472.4 million – a year on year increase of 23% or £88 million on 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 says.

"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. 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."

The Credit Services Association Ltd (CSA) is the only National Association in the UK for companies active in the collections industry and incorporates a specialist group for companies involved in the sale and purchase of debt; the Debt Buyers and Sellers Group (DBSG). The Association has a history dating back to 1902 and in excess of 400 members who represent 90% of the industry, employing 15,000 people and, at any one time, holds over £58 billion for collection, returning nearly £3 billion in collections to the UK economy per annum. Further information on the CSA can be found at: www.csa-uk.com

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