Many financial institutions and their supplier debt collectors are just starting to get to grips with the pre action protocol letters. However, added to that time consuming and expensive process it would now appear that those same collectors are to be subject to increased regulatory scrutiny by the Financial Conduct Authority.

The concern is that proceedings are commenced too quickly and possibly when motivated by either commission based structures or as part of accelerating employee based remuneration. The Credits Services Association has alerted its members that they may receive requests from the Financial Conduct Authority for certain information as to the policies they follow, the way they incentivise and pay employees, and finally the commission based structures they have with their clients.

So debt collectors need to ensure that their processes comply with the regulatory landscape in which they operate. The regulators view may be that litigation should be a last resort and not an income stream which treats customers unfairly.