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Creditors also under pressure
Tuesday 11th November 2008A leading provider of debt management services to creditors, TDX Group, has discovered that market conditions for debt collection are worsening dramatically as the economic crisis continues.
The group claim that they have seen the biggest ever deterioration in the macro conditions, which affect the ability of creditors to collect outstanding balances, and that creditors are in the worst position since the TDX Group Debt Index was put together six years ago.
The index has increased by 12% between the second and third quarter of this year. Apparently, if the index rises it shows that the environment for creditors to collect their debt has gotten worse, while a drop in the index means debt collection is becoming easier. Since 2002, the Debt Index has soared by 48%, and now stands at 30% higher than it was at the same time three years ago.
Few will be surprised that consumers are having a hard time paying off their debts: the credit crunch has hit borrowers hard and the increased cost of living, falling house values and rising number of redundancies and repossessions over the past year surely can’t have helped the matter either. What may come as a surprise is that apparently creditors are victims as well.
Chief executive of TDX Group, Mark Onyett commented: “The deepening economic crisis will mean that conditions are likely to worsen as beleaguered creditors will find it even harder to recover debts from hard-pressed consumers. Given the precarious state of the economy, there is huge pressure on creditors to manage the risk of a significant increase in default levels.”
Moral issue of the day – in these situations, does one feel sorry for the person in debt, or the creditor who has to collect it?
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