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08 December 2020
Just are the enforcement market integrator.
The collections and enforcement market is currently a multi-tier supply chain composed of creditors, panel managers, debt collection agencies and enforcement agents (bailiffs) operating with different incentives that are sometimes misaligned.
At Just we believe there is a better way to do things – using technology, data and innovation to integrate the market in a way that aligns incentives between creditors and a network of collection capability operating with the highest professional standards.
So why is the existing supply chain for enforcement so chaotic? We caught up with Victoria Oliver, Director of Client Development to find out more.
The current supply chain in the enforcement industry is disorganised primarily as a result of the nature of the agents that are used. As most agents are self-employed, they work for multiple suppliers and in almost every instance will ‘follow a case’.
If an enforcement company loses a contract and a new company takes on that contract the reality is that the people who were executing the work last week will simply move company and execute work next week.
Analysis shows that the vast majority of registered enforcement agents operating in England and Wales operate on a self-employed basis.
The market didn't always look like this: it is a picture that has emerged over time. A few years ago, it was actually typical to have regional providers aligned to the jurisdictions of the magistrates’ court and those regional providers typically employed all of their enforcement agents.
There was one provider per region and therefore the incentives of the creditor, the company and the agent themselves were much better aligned.
Before we discuss that it might be worth looking at what changed and why. The model we just talked about with regional providers has now morphed into a self-employed model, and it changed for some understandable reasons.
Creditors want to drive improved performance and competition, particularly around elements like success levels, increased visit quality and (in the old days) pricing. As such creditors naturally moved to a multiple supplier model to drive competition.
As a consequence, we saw an acceleration of the trend of agents moving to a self-employed basis. This results in the enforcement companies operating on a national basis, but the agents remaining self-employed and a local resource.
So that creates a position where today about 80 to 85% of agent resource in England and Wales operates on a self-employed basis and will work for multiple enforcement companies. This creates a challenge where the enforcement providers are reliant on a workforce they fundamentally don’t control.
This creates some real challenges for creditors also. Their customers may continue to be passed to, say, an unsuitable bailiff as a result of the work force being used by multiple suppliers.
There are also challenges for customers where multiple debts are collected by the same agent but under the auspices of different companies, preventing consolidation and which results in unnecessary visits and fees.
Lastly the agents themselves have to work under different procedures, policies, technologies and approaches depending on which company they are working for in any given day
All of this creates the risk that an agent who operates in breach of client instructions could continue to service that client’s caseload by being contracted through another enforcement company.
An enforcement market integrator approach creates lots of opportunity to address the shortcomings of this kind of model.
Firstly, we can fully align the incentives of our supply network to achieve what the creditor wants in the most appropriate way. If you don't have a vested interest in the capability or supplier that’s delivering, we can focus entirely on the right outcome for the creditor in the most appropriate way.
A market integrator would also not be driven by commercial imperatives (for example to meet an unrealistic return on investment for an acquisition) or be tempted to push caseloads into a particular entity or process in order to meet commercial objectives.
Instead, an integrator can focus absolutely on using the most appropriate mechanism that delivers the best results for the client and their customers.
Another advantage of the integrator model is that it is easier for us to bring new capabilities or innovations to the market because integrators operate through network partnerships. As such we can furnish a much broader range of capability (provided by partnering rather than acquisition) with more responsive and innovative suppliers that can respond to new opportunities or trends much more quickly.
With an integrator, the overarching approach is fundamentally regional, appointing one agency per region (alongside a backup supplier that gives us redundancy and continuity, and allows us to drive continuous supplier improvement).
We then ensure clear demarcation of that supply community, removing the possibility of the same agent executing client work through multiple suppliers, and then through this regional approach with a local exclusively deployed agent workforce, we can deliver nationwide coverage.
Critically, this supports the consolidation of debt, and therefore the reduction of unnecessary enforcement activity and associated fees. The focus on data analytics allows an integrator to select the right capability to meet client objectives with a supplier network fully aligned to operate in the right way.
Find out more about our story online.