United Kingdom Consumer Debt Collection and Debt Buying Market Report 2021



DUBLIN, October 21, 2021– (BUSINESS WIRE) – The report “UK Consumer Debt Collection and Debt Purchase Market Insight Report 2021” has been added to ResearchAndMarkets.com offer.

The report quantifies the sizes of each segment (as measured by total collections) and their respective historical and forecast growth rates while examining the key factors behind these numbers and exploring the drivers of growth and profitability.

The market has been driven by the increase in consumer borrowing over the past decade. We believe total collections reached £ 2.1 billion in 2019. However, COVID lockdowns have had a significant impact with much of the collection activity, as well as cash sales being reduced or suspended. This has led to a reduction in overall collections in 2020 of more than 25%.

We also present and analyze the drivers of growth – in particular relevant economic indicators such as total consumer debt, unemployment levels, debt cancellation rates, personal insolvency levels – and more specific factors. such as collection rates, commission levels, consumer creditors’ attitudes to the concept of selling debt and forgiveness from face value typically paid for debt.

The main debt buyers and collection agencies are profiled and their performance compared.

What’s in it?

  • Quantification of market size and historical growth rates since 2013 (or earlier)

  • Summary of market trends

  • Analysis and profiles of the main collection agencies and debt buyers

  • Our market and engine growth forecast (2021-25)

  • Insights from interviews with a range of industry experts

Market context

Debt mainly relates to consumer credit, but also includes other consumer debt.

  • The market definition excludes first residential mortgages and student loans.

  • Debt collection services are increasingly used in other areas where consumer debts are high, such as telecommunications and utilities, as well as in areas of the public sector such as housing tax. Debt buying remains mostly focused on consumer credit although it is also used to some extent for other areas.

Lenders or other creditors have the choice of using a collection agency to work on the debts on their own balance sheets, or selling the debt to a company who will then collect them on its own account.

Since the FCA assumed responsibility for consumer credit in 2014, regulation has had a significant impact on the market, resulting in substantial changes in the structure of the industry.

  • Debt collection procedures for consumer credit are now strictly regulated, requiring significant investments in systems and training.

  • Many companies have left the market and others have consolidated.

  • This has imposed costs on the industry, but has been useful for large debt buying groups in particular, as they have the capacity to invest in the development and implementation of compliant processes and therefore can operate. expect to benefit from the increased barriers to entry created by the new regulations.

  • Along with these direct impacts on debt collection, FCA regulations have resulted in a decline in high cost short-term loans (including payday loans) where debt collection services and sales of receivables have been. regularly used.

Competitive landscape

Following the consolidation, seven large groups represent a very important share of the global market. These include Cabot, PRA, Lowell and Hoist.

  • Leading players continue to make better use of data to improve their collection success and enable them to offer higher prices to improve their success in shopping portfolios.

  • Most are now part of European-wide groups seeking higher growth outside the relatively mature UK market

A key goal for all is investing in technology to reduce operating costs, improve service levels and demonstrate regulatory compliance.

Moorcroft is the largest pure debt collection agency that does not buy independent debt. Several more were acquired by debt buying groups with a long tail of small collectors, many focusing on specific niches, still in business.

Main topics covered:

European debt buying market

  • The market in which European debt purchasing / collection groups operate strongly overlaps that of large private investors

  • There has been a major NPL sales program across Europe since 2014, supported by the ECB and governments to support potentially insolvent banks

  • Italy has recorded the highest volume of significant sales of NPL, both in 2020 and since 2014. Spanish banks have also been big sellers, but French banks have not.

  • Biggest buyers of NPL’s large portfolios were investment / private equity firms, but large buying / debt collection groups were also involved

  • Utility / Telecom debt is frequently bought and outside the UK portfolios including secured debt and SME debt but not student loans

  • The proposed EU directive should lead to a single market for the purchase and collection of debts and encourage settlements rather than litigation

  • Technological innovation is a top priority. It focuses on creating pan-European platforms and setting up self-service operation, in order to reduce costs

Market size

  • The market size methodology is top-down, crossed with bottom-up company data

  • The UK has the largest consumer credit sector in Europe, followed by the other largest economies

  • The percentage of NPL varies. Greece is by far the highest market, followed by other markets in Southern and Eastern Europe

  • UK has highest non-performing consumer credit balance

  • The picture changes somewhat if secured debts are included

  • The size of addressable markets is affected by a series of country-specific factors

  • The propensity to sell is linked to the maturity of the market and the structure of the banking sector

  • The ability to collect is a key determinant of the amount of debt that can be sold in each market.

  • Collection is considered the easiest in Northern Europe

  • The UK is the largest market by some margin, followed by five markets of similar size

  • Our analysis of the accounts of the main debt repurchase / recovery groups gives figures which are broadly close to our market estimates.

  • The performances of the main groups and interview testimonies show that the market was developing rapidly before the pandemic. Growth is expected to resume.

Competitive landscape

  • There are eleven major European groups with a book value of over 800 million euros

  • The main European players have bought out around sixty companies over the past 10 years, mostly buying collectors rather than existing buyers

  • Differences in performance ratios reflect business models (e.g. internal or outsourced collection) and use of technology

Buyer Profiles

  • World arrow

  • Axactor

  • B2 Holding

  • Encore Capital (Cabot)

  • EOS Europe

  • Lift financing

  • Kruk

  • Intrum Group

  • Link (LCM) Europe

  • GFKL Lowell

  • Other European companies

For more information on this report, visit https://www.researchandmarkets.com/r/3aca9w

See the source version on businesswire.com: https://www.businesswire.com/news/home/20211021005712/en/


Laura Wood, Senior Press Director
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