Debt recovery firms face coronavirus and data protection trade-off

Firms are facing situations in which they must balance the stringent requirements of GDPR and the ongoing coronavirus outbreak, meaning that unlike in other sectors, staff dealing with customers and their personal data are often unable work from home.

Jayne Gardner, partner in law firm Corclaim’s debt recovery team, told Credit Strategy that, like other businesses, those in debt recovery will have to make operational changes to safeguard their staff and also maintain service levels with clients.

For John Ricketts, Credit 500 member and managing director of Ardent Credit Services, this has meant operating business as usual, while imposing a social distancing policy within the office.

“From a call centre point of view, we have considerations around customer data and data security, but we’re exercising social distancing within the office,” he told Credit Strategy.

“We’ve got about 12 people working from home, but they’re not touching customer data. They’re only working with anonymised data to build reports and statistics. Our frontline call centre agents are very busy and we’ve spread them out to ensure the risk of spread is limited. We made hand sanitiser available to every agent from early February onwards.”

For customers, Ricketts said Ardent has introduced a new vulnerability flag of ‘Covid-19’, which means the firm has extended its forbearance procedures to include people affected by the pandemic.

“What we then do is provide that person with 30 days’ breathing space, which we’d then review and extend further as required,” he said.

“Our industry is better suited than most to cope with this sort of issue because our staff are already well-trained and well-versed in exercising forbearance.”

Some larger firms in the space appear to be less affected by the tension between data protection and efforts to curb the spread of the virus.

Klaus-Anders Nysteen, chief executive of pan-European debt purchaser Hoist, said the vast majority of staff there are now working from home. In the UK, the firm said, 80 percent of staff are working from home.

He said: “Covid-19 is testing our operations in the sense that the countermeasures introduced in our markets limit the access to our offices. Our operations are digital by default, which means that access to our physical premises is not a prerequisite to keep the shop open. Right now, around 90 percent of Hoist Finance’s employees are working from home. They have access to all necessary systems, and we are conducting our day-to-day work in the same way as before.

“Previous crises have taught us that our business model is reasonably well protected from macroeconomic downturns. We are not completely insulated from unemployment, but typically what we see is that somewhat lower collections now is compensated by higher collections later.”

Peter Wallwork, chief executive of the CSA, said: “Between them, our members are approaching or in contact with the six million or so households in debt throughout the UK, almost every day and therefore have a unique insight into supporting those in debt - the current Covid-19 pandemic is already placing many of those customers into financial difficulty, or simply compounding existing difficulties even further.

"However, our members are possibly the best placed to help as they continue to  exercise forbearance and extend breathing space to customers impacted by this new threat to their financial stability, just as they have always done for customers especially those who may be classed as vulnerable. I believe it is critical that our members continue this activity and assist those people who are bound to be extremely concerned about their situation and signpost where necessary to free to use debt advice."