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Debt Services (Commercial & Consumer) Market Report 2013

  • January 2013
  • -
  • Key Note Publications Ltd

Executive Summary

This Key Note Market Report covers lending to individuals — including consumer credit and loans secured on dwellings — as well as lending to corporate bodies, which includes financial corporations, non-financial corporations, unincorporated businesses and non-profit-making organisations (NPOs). The debt services industry focuses on both the management and collection of these debts by companies set up specifically for that purpose. Debt management agencies work for the indebted consumers and companies to liaise with creditors and bring about a resolution to debt issues, whereas debt collection agencies work for the creditors to try and recover unpaid debts.

The debt services industry is almost unique, in that it is one of the few which truly profits from an economic slump; during periods of poor economic performance, when unemployment and inflation are high, more people turn to debt management companies to try and ease their debt burden. In 2008 and 2009, the total UK lending by monetary financial institutions increased by 13.4% and 2.3%, respectively.

In 2011, the largest sector of the market was loans secured on dwellings, which recovered relatively quickly from the slump seen in 2008. This was followed by loans to other financial corporations, although such loans outstanding were down from their 5-year peak in 2008.

Although the debt services industry is performing well in the wake of unsustainably high levels of consumer debt built up prior to the recession, debt management firms are operating in an ever-more tightly regulated environment. In September 2010, the Office of Fair Trading (OFT) informed 129 debt management firms that they risked losing their consumer credit licences unless they took immediate action to comply with the OFT’s debt management guidance. As a result, by March 2012, over 80 companies had left the industry, either voluntarily or as a result of having their licence revoked by the OFT for non-compliance. The Financial Services Bill — at the Review Stage in the House of Lords at the time of publication (January 2013) and expected to receive Royal Assent by early 2013 — will also provide the debt services industry with tighter regulations to work in.

In 2011, there were a total of 142,430 individual insolvencies recorded in the UK. Although this was lower than the peak of 159,641 in 2009, it remains considerably higher than in 2007, prior to the financial crisis. Individuals are increasingly being forced into insolvency as their debts become too great to manage.

With unemployment high and expected to remain so until 2015, demand for the services offered by debt management companies should also remain high. In addition, the prospect of rising inflation — spurred by any future possible expansion of the Bank of England’s (BoE’s) quantitative easing policy or an increase from the historically low base rate of 0.5% — could impact significantly on heavily-indebted consumers, thus leading to an increase in consumers seeking debt management assistance.

Table Of Contents

Debt Services (Commercial and Consumer) Market Report 2013
Table of Contents

Foreword

Executive Summary

Market Definition

REPORT COVERAGE
Consumer Credit Services
Commercial Credit Services
MARKET SECTORS
Lending to Individuals
Lending to Businesses
MARKET TRENDS
OFT Review of the debt services industry
Household Debt
Individual Voluntary Arrangements
Few Adults Concerned About Level of Debt
Decline in Debt Consolidation
Payday Loans
ECONOMIC TRENDS
MARKET POSITION
The UK
Overseas

Market Size

THE TOTAL MARKET
BY MARKET SECTOR
Lending to Individuals
Lending to Businesses

Industry Background

RECENT HISTORY
NUMBER OF COMPANIES
EMPLOYMENT
REGIONAL VARIATIONS IN THE MARKETPLACE
Mortgage Possession Notices
Individual Insolvencies
Company Liquidations
DISTRIBUTION
HOW ROBUST IS THE MARKET?
LEGISLATION AND REGULATION
Financial Services Bill
Debt Management Plans
The Enterprise Act
Insolvent Companies
Individual Voluntary Arrangements
The Lending Code
The OFT's Debt Management Guidance
KEY TRADE Associations
Council of Mortgage Lenders
Credit Services Association
Debt Management Standards Association
Debt Resolution Forum
Federation of European National Collection Associations
Foundation for Credit Counselling
The Institute of Credit Management

Competitor Analysis

THE MARKETPLACE
MARKET LEADERS
Allied International Credit (UK) Ltd
Baines and Ernst Ltd
BCW Group Ltd
Churchwood Financial Ltd
ClearDebt Group PLC
Debt Advisory Line Ltd
Fairpoint Group PLC
Gregory Pennington Ltd
Harrington Brooks (Accountants) Ltd
Invocas Group PLC
Marston Group Ltd
MoneyPlus Group Ltd
Payplan Ltd
OTHER COMPANIES
Controlaccount PLC
Experto Credite
Lawrence Charlton Ltd
Philips Collection Services Ltd
Regal Credit Consultants Ltd
MARKETING ACTIVITY
Exhibitions and Conferences

Strengths, Weaknesses, Opportunities and Threats

STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

Buying Behaviour

LOANS
ATTITUDES TOWARDS CREDIT AND DEBT
Introduction
Attitudes Towards Credit and Debt

Current Issues

OFFICE OF FAIR TRADING
Tougher Guidelines for the Debt Services and Credit Repair Industries
Debt Collection Guidelines
Mental Capacity Guidance for Creditors
Suspension of Consumer Credit Licences
GOVERNMENT
Helping Over-Indebted Customers
Intervention and Recapitalisation
THE EUROZONE
MARKET TRENDS
Low Awareness of Free Debt Advice
Payday Lending and Other Forms of High-Cost Credit
Consumer Attitudes to Credit
Council of Mortgage Lenders Third Quarter Report
Rise in Individual Voluntary Arrangements
Price Comparison

The Global Market

HOUSEHOLD WEALTH AND INDEBTEDNESS IN SELECTED OECD COUNTRIES
GLOBAL COMPARISONS
Europe
The US
Canada

Forecasts

ECONOMIC FORECASTS
TOTAL AMOUNT OF LENDING OUTSTANDING
INDIVIDUAL INSOLVENCIES IN THE UK
FORECASTS TO
Total Forecast Lending
Forecast Household Borrowing and Debt
MARKET GROWTH
FUTURE TRENDS
Upwards Trend in IVAs
Office of Fair Trading Warnings and Action
The Role of Charities
A More Cautious Approach to Lending

Company Profiles

INTRODUCTION
DEFINITIONS
Turnover (Sales)
Pre-Tax Profit
Profit Margin
Average Remuneration
Sales per Employee
FURTHER INFORMATION

ALLIED INTERNATIONAL CREDIT (UK) LTD

Previous Name and Date of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

BAINES and ERNST LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Codes
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

BCW GROUP LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Codes
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

CHURCHWOOD FINANCIAL LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

CLEARDEBT GROUP PLC

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

DEBT ADVISORY LINE LTD

Previous Name and Date of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

FAIRPOINT GROUP PLC

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Codes
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

GREGORY PENNINGTON LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

HARRINGTON BROOKS (ACCOUNTANTS) LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

INVOCAS GROUP PLC

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

LAWRENCE CHARLTON LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

MARSTON GROUP LTD

Previous Name and Date of Change
Principal Activities
SIC Codes
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

MONEYPLUS GROUP LTD

Previous Name(s) and Date(s) of Change
Principal Activities
SIC Code
Structure
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios

Further Sources

Associations
Publications
General Sources
Government Publications
Other Sources
Key Note Sources
Key Note Ltd

Understanding Consumer Survey Data

Number, Profile, Penetration
Social Grade
Standard Region

Key Note Research

The Key Note Range of Reports

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