allpay.net Speaks Out on New Consumer Credit Legislation

Bill payments and collections specialist allpay.net is urging housing associations, councils and their debt collection representatives to maximise use of latest payment channels and technology to reduce the risks of prosecution.

This follows more stringent legislation affecting debt collection practices coming into force from 6 April 2007.

Amendments passed last year to the Consumer Credit Act 1974, including the replacing of the longstanding "extortionate credit" test with a new test based on unfairness, will now have significant practical implications for debt collection agencies.

If they are seen to collect money "unfairly" there may be serious ramifications for them and their clients, even leading to debts being totally written off.

In addition to the swipecard bill payment method that has become increasingly popular in recent years, allpay.net recommends organisations start offering a broader range of ’21st century’ payment channels to maximise the opportunity for their customers to pay on time.

Latest bill payment solutions will allow organisations and collections agencies to have their customers pay at any time of the day, seven days a week over the telephone by Interactive Voice Response, over the Internet, self-service payments at stand alone terminals and by SMS text message.

They can also make payments via interactive TV.

Former bailiff and founder of allpay.net, Tony Killeen, said: "To reduce the risk of prosecution an innocent until proven guilty approach is the name of the game, making it as simple and convenient as possible for your customers to pay. Providing collections agencies are being seen to do everything possible to enable customers to pay in a fair and reasonable timeframe, they will have little to fear from the new unfairness test."

Mr Killeen added: "From our experience of helping many clients including collections agencies, the large majority of late payers are not serious cases and will always respond more positively to a consumer-friendly approach. This puts the onus on creditors and their agencies to streamline their internal administration and reporting to ensure they clearly identify which few cases may warrant more stringent action compared to the many who probably won’t. There is a growing range of easy-to-use bill payments and collections technology available to help in this process to the benefit of all parties concerned."     

According to a recent independent poll by social housing and public sector news site 24dash, the majority of public sector workers (66 per cent) are still unaware of the legislative changes and the increased risks of prosecution facing their organisations under the new unfairness test. Of those who are aware of the new legislation, 24 per cent claim that the legislation will make them far more cautious with their debt collection.