Billions of pounds worth of government loans, designed to support businesses through the pandemic, could eventually be recovered by debt collection agencies on behalf of banks, according to The Times.
The Bounce Back Loan Scheme (BBLS) provides loans of up to £50,000 to businesses struggling in the face of the Coronavirus pandemic. To date it has delivered £38 billion to 1.3 million businesses.
Because of the huge volume of loans due to be collected, and the potential vulnerability of the businesses who took out loans, banks have predicted there will be significant challenges in managing the collection process.
Any unrecoverable debts would be returned to banks, who would in turn claim back on the state guarantee placed on every loan under the scheme. The National Audit Office has warned that a failure to recover loan payments could cost the government £26 billion.
Debt Collection Agencies are up to the task
Debt collection is a specialist skill that requires dedicated resources, processes, and training to do in a fair, ethical and effective manner. Banks realise this, which is why there are talks of outsourcing this task to debt collection agencies, who are set up specifically to deliver such services. It is hoped this will reduce the burden on the government financially.
DCBL, as part of the Direct Group, has a full range of capabilities, ranging from highly effective letter cycle debt recovery and pre-court agent visits, through to litigation and High Court Enforcement.