Consumer debt passed to debt collection agencies (DCAs) or sold to debt buyers has reached an all time high of ?61.4 billion figure, according to the latest quarterly statistics from the Credit Services Association (CSA).
The CSA, the official body representing the UK debt collection industry, said this is a year-on-year increase of 18% or ?9.5 billion, up from ?51.9 billion in the second quarter of 2011. And it represents a rise of 5% or ?3 billion on the first quarter of 2012 (?58.3 billion).
The figures show that unpaid consumer debt held by CSA members for collection was made up of ?33.2 billion placed by creditors with DCAs to collect, and a further ?28.2 billion of purchased debt owned by debt buyers.
And while the gross totals have increased, so too have the individual balances: the average individual account balance rose to ?1,189 at the end of the second quarter of 2012, up from ?1,133 in the previous quarter - the highest value ever recorded by the CSA. It follows almost precisely a US trend recently reported by the Federal Reserve Bank of New York.
The values of consumer debts actually collected have similarly risen. The total consumer debts collected in quarter two of 2012 stood at ?472.4 million ? a year-on-year increase of 23% or ?88 million on the same quarter in 2011.
Sara de Tute, president of the CSA, said that the figures may suggest a number of different debt types and consumers being evident for the first time.
She said: ?A typical debt portfolio might comprise a high number of comparatively small debts of the kind owed to utility companies, mobile phone companies, mail order companies etc.
?The trend towards a larger average balance for each debt could suggest that more customers within ?middle England? are falling into debt for the first time, and certainly this is a view that is shared anecdotally by some of our members.?
Date: September 21, 2012
Author: Joanne Atkin
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