The sale of defaulted debts to debt purchasers reduces creditors’ operational and financial burdens associated with debt collection. Our customers also benefit. Wherever possible, we work with people to understand their personal circumstances and tailor repayment plans to their situation. We also work closely with specialist organisations, like debt charities, and signpost customers to free, independent advice.
Debt recovery is a key element of the business model of any provider of debt or other credit to consumers or commercial entities. Typically, creditors achieve debt recovery through internal debt collection, outsourcing to a third party specialist agency or the outright sale of debt to a third party organisation such as Arrow Global. Most major creditors use a combination of these three approaches in order to maximise recoveries.
Receivables sold in the UK include credit card, personal loans, utility, telecommunications, motor, mortgage shortfall and retail debt. Organisations that utilise debt sale represent a broad cross section of creditors, including financial institutions (particularly retail banks), utility providers, telecommunications companies and retailers. Debt is typically sold either through one-off (spot) transactions or more regular and long term (forward flow) agreements, the latter of which exist for a pre-agreed period and provide the purchaser with a supply of new accounts at regular intervals, usually monthly.