Banks Strengthening Debt Collection Teams
Big 4 UK Back Preparing for Covid Loan Collection
With emergency covid loan payments becoming due, the UK’s High Street banks are hiring staff and strengthening their debt collection teams in preparation for the large amount of defaulted payments that has been forecast.
It is reported that up to 750 staff have been hired by the UK’s four largest banks as they face up to the major challenge facing them. Natwest is reported to have taken on an extra 150 debt collection agents to handle recovering overdue covid loans while HSBC has taken on up to 200 extra staff to help tackle the expected loan defaults.
As part of their training, the new banking debt collection teams will be ordered to demonstrate empathy with business owners in difficult financial situations. This is in line with FCA requirements and directives issued. The softer approach is an attempt by the banks to avoid a repeat of the reputational damage incurred following accusations of heavy handed and aggressive debt collection practices during the 2008 financial crash.
The UK government initially estimated that losses on the most popular bounce back loan scheme could be as high as sixty per cent. This loan enabled small businesses to borrow up to £50,000, yet is rumoured to have been manipulated by fraudsters.
