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Debt Collection News Roundup – November, 2018

Here at Access Credit Management we like to bring our readers interesting and relevant news about our industry so once a month we publish a News Roundup.  This is intended to let you know what’s going on and keep you informed of all the important news within the sector so that you have a resource to make sure you receive of all the latest news. 

 

It would be interesting to know what you, the readers, think of the stories that feature here.  Please join in by adding your comments on our Facebook page, tweeting on Twitter or email us if you come across anything that you think we should include.

Our first news item is that the US Federal Reserve has identified high corporate debt, deteriorating credit standards and elevated asset prices as the biggest risk to the US economy, according to a Financial Times Stability Report.  It’s being predicted that the US economy’s record expansion is coming to an end and what happens in the US generally affects other countries around the world.  This is particularly relevant right now as the tariffs being imposed by the president create an uneasy atmosphere.   Here in the UK, we need to keep an eye on developments which could affect us as we struggle with the uncertain economic climate surrounding the Brexit negotiations.

HMRC is advising people with outstanding debts to the tax office to consider taking out personal loans to pay off the money they owe!  A report by the National Audit Office (NAO) which analyses public spending, warns that local authorities and government departments are often more aggressive in pursuing debt quickly than is appropriate.  This development comes in the wake of the government’s consultation on the new “Breathing Space” initiative designed to help those with problem debts by offering additional statutory protections from predatory collectors.  Perhaps this is a case of the left hand not knowing what the right hand is doing!

As part of the recent Budget, Chancellor Philip Hammond disclosed that HMRC will partially regain its status as “preferred creditor” in cases of corporate insolvency.  This will give it a priority claim on the assets of insolvent companies, decreasing the likelihood that other businesses and individuals will recover all of the money owed to them.  The change is due to come into force in April 2020 and is expected to result in an extra £185 million reaching the Treasury’s coffers.  The insolvency and restructuring trade body, R3, has criticised the development, claiming that it will have a negative impact on creditors who are in significant danger of losing some or all of what they are owed and is calling on the government to reconsider.

Our last news story concerns an innovative approach to raising funding to pay off a debt.  Two men from Albania fell into debt after being charged £11,000 each to be smuggled into the UK to seek a better life.  In order to pay the debts, the pair were ordered to jointly run a “sophisticated” cannabis farm concealed within a disused Indian restaurant in Hull.  The owner of the premises visited and discovered a professional “grow” in progress and called police who found more than 800 skunk plants and 600 seedlings!  The street value of the potential crop was estimated at around £50,000, more than enough to pay off the debt.  Both men, who had no previous convictions, admitted the crime, but were concerned about the repercussions for their families back in Albania.  They have both been served deportation notices and jailed for 32 months, after which time, it is highly likely they will return to their home country.