The impact of the FCA on Law Firms has been far reaching and very occasionally at odds with the Solicitors Regulatory Authority. That said, the need to ensure all collection providers are singing off the same hymn sheet couldn’t be clearer or more necessary. As a law firm who collects debt, we have found the change from the OFT to the FCA a welcome exercise. To review, revise or improve all your policies and procedures and then evidence that you have done so, can only serve to reassure your client’s quality and assurance departments that you are fit for business instilling confidence all round. Nor can it fail to make your operation more defined and efficient - so where’s the downside? The fear of making a mistake, of being financially or professionally penalised or (whisper it) publicly vilified, has made us all hyper vigilant and super aware of our responsibilities to all the customers we have face-to-face contact with and again this is only a good thing. You’d have to have three wise monkey syndrome to be unaware of the difficult financial situation some people are in and if you believe in the old adage of ‘there but for the grace…’ we can all see why things had to change.
Customer focussed collections is better for our business, better for our clients and much can be achieved pre-litigation with the right skills on the phone empathetically assessing someone’s financial situation. It’s that one-to-one contact that ensures that the next steps taken, are the right steps. As Solicitors, we have seen a definite change in instructions from our clients, although they are still seeing the benefits of issuing proceedings and securing a judgment, they are more inclined to be cautious and considered before acting.
With financial sector clients in particular, there has been a significant drop of applications for Charging Orders to enforce the Judgment, despite the fact that this was perhaps, once upon a very long time ago, liberally applied for with a very broad brush due to its effectiveness. In fact, the decline in Charging Order applications continues despite the Charging Orders (Order for Sale: Financial Thresholds) Regulations 2013 which came into effect on Friday 5 April, This meant that the Courts have made it easier to enforce a Charging Order by reducing the threshold of money owed from £25k to £1k. Nowadays, our clients are looking for methods of securing reparations awarded without appearing to be a close relation of the child catcher from chitty chitty bang bang. They still want their money; they’re still very much entitled to pursue their money…. but they are doing so conscientiously and with real regard for people’s financial circumstances.
This does not mean they shy away from legal action, only they need to make it work for them…. This is where we come in! Indeed clients are more comfortable opting for ‘Attachment to Earnings’, or court ordered instalments to recover their losses. Basically, seeking affordable solutions that do not cause a major upset or lifestyle change. Inevitably there may be a wait for all of the debt to be repaid, but as a client, they know they have taken every ethical step possible to recoup the losses for their business and its shareholders whilst maintaining that all important reputation.