A nice end to the year, gathering folks from across the Debt Support sector to discuss some of the latest developments in the regulatory landscape, data and technology, with a view to 2026. Interesting summary of themes and what is bubbling.
Some notes from the session below.
w/ thanks to MEGA.AI for sponsoring the afternoon.
Key Take Aways
- The UK collections and debt solutions sector is broadly stable but operating under sustained pressure from higher funding costs, refinancing, and debt restructuring, against a backdrop of intense regulatory and public scrutiny.
- The regulatory “conveyor belt” now spans Consumer Duty, SMCR and non-financial misconduct, FOS funding reform, ICO expectations on DSARs, product sales data, credit information governance, motor finance redress and multiple sector-specific regimes, materially increasing complexity and cost.
- Data quality and alignment across creditors, debt buyers, CRAs and debt advisers are emerging as systemic issues, particularly around product sales data, mis-reported accounts and inconsistent use of flags such as DMPs and arrears, with clear risks of consumer detriment.
- Arrears and problem-debt indicators continue to rise across credit unions, utilities and local authorities, with exhausted coping strategies and increasing reliance on high-risk borrowing and informal lenders, raising concerns about a “slow-burn” debt crisis.
- Consumer Duty is pushing firms towards more evidence-based, outcomes-focused practice, including benchmarking, income optimisation, earlier identification of ability-to-pay issues, and more consistent treatment of vulnerability across sectors.
- Personal insolvency reform proposals—shorter three-year repayment terms, reduced creditor influence, and more “nationalised” processes—pose strategic risk to voting agents, DMP providers, IVA firms and creditors, and could significantly alter recoveries and customer journeys.
- Operational resilience expectations have expanded from major banks to SME-scale firms in debt management and collections, including resilience to outages at critical third-party providers (e.g. cloud, banking rails) and the need to prevent “intolerable harm” to customers when distributions fail.
- Quality assurance has shifted from sample-based call listening to near-100% speech analytics, auto-scoring and richer MI, with the FCA now directly testing QA frameworks and linking them to Consumer Duty and outcome monitoring.
- Practical AI adoption is moving from hype to “return to work” delivery: firms are focusing on realistic, everyday use cases such as knowledge-base search, call transcription and analysis, agent-note and document summarisation, content creation and small back-office automations. Transcript
- Collaboration and data sharing—across debt collectors, utilities, DWP, debt advisers and technology providers—are seen as essential to identifying eligibility for support (e.g. social tariffs, write-offs), preventing mis-collection, and improving outcomes under Consumer Duty.
- There is growing concern that some regulatory and policy changes (e.g. motor finance commission redress, removal of home credit, proposed insolvency reforms) may have unintended consequences, including higher cost of credit, unfair redress methodologies and weakened incentives for responsible repayment.
- Public perceptions of collections remain mixed, but direct customer experience is often more positive than expected, with evidence of forbearance, support and sustainable repayment arrangements when engagement happens—highlighting the importance of tackling misinformation and encouraging early contact.
Innovatation
- AI-enabled QA and monitoring
- Transition from manual sampling to near-100% speech analytics, auto-scoring and richer QA frameworks, enabling more consistent oversight, outcomes measurement and Consumer Duty evidence.
- Income optimisation and advanced affordability assessment
- Systematic use of income-maximisation tools, open banking and credit-file insights to validate income and expenditure, detect early affordability stress and support sustainable arrangements.
- Cross-sector data-sharing models
- Collaborative initiatives between utilities, local authorities, DWP and analytics providers to auto-identify eligibility for social tariffs, write-offs and other support, reducing “tell-me-many-times” friction for consumers.
- Everyday AI use cases
- Deployment of generative AI for knowledge-base search, fast answers to complex queries, call transcription and analysis, agent-note and document summarisation, and content creation to support agents and digital channels. Transcript
- Operational-resilience tooling and governance
- Enhanced AI usage policies, cyber-security controls, and resilience frameworks for cloud-based CRMs and client platforms, driven by FCA expectations and real-world outages at major banks.
- Evolving frameworks for vulnerability and “ability to pay”
- Transition from narrow “vulnerability” language to broader “ability to pay” concepts, with emerging multi-sector standards and MAPS-driven models for digital debt advice and gateway assessments.
Key Statistics
- Around 10,000 frontline staff employed in the sector. Transcript
- Roughly 55% of accounts handled are consumer credit; around 16% utilities; about 7% public sector. Transcript
- Approximately £40bn of consumer debt is managed, with about £3.5bn collected. Transcript
- Around £6bn face value of debt purchased in 2024; about £10bn of commercial debt held, £1bn collected. Transcript
- Circa 46 million accounts are managed, with complaints arising on only 0.23% of accounts. Transcript
- Complaint uphold rate is roughly 31–32%. Transcript
- Financial Ombudsman Service annual budget about £215m, employing roughly 2,000 staff; case fee moving from £650 to £680 in consultation. Transcript
- Ofgem data: average energy debt where no time-to-pay is in place is around £1,700; total energy arrears about £4.4bn.
- Local authority arrears around £6.6bn, with average council-tax balances rising.
- Estimated over 7 million people in the UK are struggling with bills or debt, including essential services. Transcript
- Approximately 87% of new debt-advice sessions at one major provider are delivered digitally; that provider accounts for about 60% of all “breathing space” cases.
- FCA wrote to 34 firms requesting detailed QA frameworks; directors face new reporting requirements from 18 November to align data held by the FCA and Companies House.
Key Discussion Points
- Sector stability vs. structural change – A sector that is not in crisis but is being reshaped by refinancing, higher funding costs, and ongoing M&A activity.
- Regulatory “conveyor belt” – The cumulative impact of overlapping initiatives (Consumer Duty, SMCR, non-financial misconduct, FOS funding, ICO guidance, PSD, credit information governance, sector conduct rules).
- Consumer Duty and legacy legislation – Tensions between principles-based outcomes and prescriptive Consumer Credit Act requirements, driving duplication and customer confusion.
- Data quality and consumer detriment – Misalignment of product-level data between creditors, buyers and advisers; misreporting of DMPs and arrears; and the risk that outliers are identified and sanctioned using PSD.
- Rising arrears and exhausted coping strategies – Growth in arrears across utilities, credit unions and local authorities, with concerns about migration towards informal lenders and the “dark side” of the credit market.
- Personal insolvency reform – Proposals for a more nationalised regime, three-year payment terms, reduced role for voting agents and advisers, and the associated risks to fair value and creditor engagement.
- Breathing space and advice-route inconsistencies – Disproportionate share of breathing-space usage by one provider, inconsistent protections, and the interaction with future insolvency gateways. Transcript
- Operational resilience and third-party risk – The extension of resilience expectations to smaller firms, especially where outages at major banks or cloud providers can cause “intolerable harm” through missed distributions.
- QA frameworks and outcome monitoring – FCA scrutiny of QA approaches, movement to 100% speech analytics, and the requirement to link QA outputs to Consumer Duty outcome metrics and board reporting.
- Pragmatic AI adoption – Shift from AI anxiety and “Star Trek” visions to practical use cases in knowledge management, call analytics, summarisation and small-scale automation; recognition that AI now sits in the “everyday” rather than purely “game-changing” quadrant. Transcript
- Collaboration and data sharing – Emphasis on multi-party collaboration (collectors, advisers, utilities, DWP, tech firms) to identify support eligibility, standardise vulnerability/ability-to-pay frameworks and reduce duplicated customer effort.
- Public perception, misinformation and early engagement – Persistent myths about collections contrasted with relatively low complaint rates and often positive customer experiences, highlighting the need to tackle misinformation (including online campaigns) and encourage earlier customer contact.
Description
This event presented a comprehensive discussion of how regulation, data and technology are reshaping the UK collections, debt purchase and debt-advice ecosystem.
It examined sector stability, the cumulative impact of a dense regulatory agenda, Consumer Duty implementation, product-level data challenges, and rising arrears across essential services. The conversation explored personal insolvency reform, breathing-space inconsistencies, and the growing importance of collaboration and data sharing.
It also covered operational resilience, QA evolution, cyber risk, and the practical deployment of AI in call analytics, knowledge management and automation—framed as a “return to work” on realistic use cases rather than speculative hype.
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