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Virtual enforcement visits - time for change

08 July 2020

Enforcement firms perform a difficult task. Getting a debtor that has, in most cases, avoided demands for payment from the creditor themselves or their debt recovery providers for many months or years can be challenging. Traditionally, enforcement firms have therefore relied upon a swift movement from sending a letter to physical visits. Physical visits are expensive to perform, and the costs associated with these are passed onto the debtors in the normal way.

In most cases, the order that the enforcement agent is instructed upon, is not to recover payment, but to take control of the debtor’s goods and sell them to recover the debt. The process leading up to enforcement is the opportunity for the debt recovery sector to chase for payments. Once the court gives instruction, the process is driven towards securing payment through seizure of goods.

In modern times, however, enforcement agents have increasingly spent more time and effort in trying to get debtors to engage early and make a payment by giving them a set number of days from initial notice to do so. When a debtor fails to make contact, or does make contact but needs an extended period to pay, the enforcement agent will generally accept that extended period but only after securing the payment plan against assets, which he/she is required to attend, and take control of (on paper, rather than physically). The costs associated with these visits are passed onto the debtor.

Virtual enforcement visits
In July 2020, for the first time in history, Just launched the sectors first ever virtual enforcement solution. This process has the following advantages:

  • The compliance stage of the enforcement process is significantly increased in time.
  • With both parties’ consent, a virtual enforcement visit replaces a physical enforcement visit. This will allow adherence to any form of social distancing measures which are likely to remain in place for some time, even once the country returns to some type of normality.
  • Virtual enforcement visits significantly reduce the need for face-to-face visits – particularly at a time when financial vulnerability is increasing.
  • Virtual enforcement visits cost less to undertake and, as such, can be provided at a discount which is passed directly to the debtor to increase the chances of them paying the principal amount.
  • The virtual enforcement solution is underpinned by open banking and accounting technology, which is designed to assess a debtor’s ability to pay, identifying vulnerability from the outset and directing vulnerable debtors to engage with the debt advice sector where appropriate.

A debtor requiring more time to pay, or a period of forbearance, is now able to achieve this without the need to let an enforcement agent through their door.

Summary
The enforcement of court orders is vital to the economy and to ensure compliance is maintained, and those that do pay, are not paying for those that refuse to do so. The enforcement of debts using enforcement agents has been crucial since the dismantling of debtor prisons in around 1869. What’s essential now, however, is that we take a modern approach to the delivery.

We believe that reducing the amount of debtor interaction at the door, and taking it into an environment using the right technology, is a thoughtful and modern approach to enforcement. Where a traditional approach is required, it should be used, but only where the conventional method is considered to be the right approach, based on intelligence and understanding of the debtor in question.

When enforcement returns, I am positive it will be more innovative, modern and sensitive to the debtor’s circumstances than ever before and that virtual enforcement visits will become part of the norm. 


Just.

Find out more about the enforcement market integration approach we take and read testimonials from some of our customers who are the largest creditors in the UK.  


About the Author: Jamie Waller

Jamie Waller is an entrepreneur, investor, author, and philanthropist. In 2018 he was awarded the prestigious Cranfield Business School, Entrepreneur of the Year and has been responsible for the formation, development, and sale of two previous businesses in the financial services industry.

Jamie is the Chairman of the Arum Group of companies.