Debt Management (Commercial & Consumer) Market Report 2006: Industry Report

Debt Management (Commercial & Consumer) Market Report 2006

Product Type: Market Research Report
Published by: Key Note Publications Ltd
Published: August 2007
Product Code: R310-1474

Description

As at the end of 2006, the total amount of lending outstanding (or debt) in the UK was £1,868.1bn, a rise of 12.9% on 2005 and 48.2% higher than the figure recorded in 2001. The amount of debt in the UK is currently a matter of considerable debate and concern.

This Key Note Market Report covers lending to both individuals, including consumer credit and loans secured on dwellings; and corporate bodies, including other financial corporations, non-financial corporations, unincorporated businesses and non-profitmaking organisations. In 2006, the largest sector was loans secured on dwellings, and the fastest-growing sectors between 2001 and 2006 were loans made to other financial corporations and loans to non-financial corporations.

The debt management and credit industry is faced with an ongoing array of legislation and regulatory changes. The most important of these included the introduction of the Consumer Credit Act 2006, which principally amends the Consumer Credit Act 1974.

The Competition Commission has also introduced measures aimed at increasing competition in the home-credit market, and the British Bankers' Association (BBA) and representatives of the Individual Voluntary Arrangement (IVA) industry have agreed to work together to create industry standards for that sector. The Financial Services Authority (FSA) has also commenced an investigation into the British sub-prime mortgage market and will assess, among other investigations, whether mortgage borrowers with poor credit histories are being treated fairly by lenders.

The IVA is one of the growth sectors of the debt management industry. Companies that provide IVAs for people who are unable to pay their debts receive fees from creditors for administering the scheme. However, the creditors involved, which include banks and other lenders, have decided to substantially reduce the fees they pay to the IVA providers. These reductions are expected to have a severe impact on the providers, and many have had to change their business plans considerably to accommodate the change.

The amount of lending outstanding to UK borrowers is forecast to continue to rise up to 2011, especially within the business sector. However, increases in UK interest rates could have a serious impact on the market and result in an increase in the number of borrowers defaulting on their loans. If this situation materialises, then demand for the services of debt management companies looks likely to remain strong.

Table of Contents

Executive Summary
1. Market Definition: REPORT COVERAGE; Consumer Credit Services; Commercial Credit Services; MARKET SECTORS; Lending to Individuals; Loans Secured on Dwellings; Consumer Credit; Other Lending; Loans to Other Financial Institutions; Loans to Non-Financial Corporations; Loans to Unincorporated Businesses and Non-Profitmaking Bodies; MARKET TRENDS; Amount of Outstanding Debt Continues to Increase Strongly; Rising Interest Rates; Individual Insolvencies; House Repossessions Increased in 2005; Minimum Repayments for Credit-Card Issuers; Providers of Individual Voluntary Arrangements; ECONOMIC TRENDS; Population; Inflation; Unemployment; Gross Domestic Product; Household Disposable Income; MARKET POSITION; The UK; Overseas
2. Market Size: THE TOTAL MARKET; BY MARKET SECTOR; Lending to Individuals; Loans Secured on Dwellings; Consumer Credit; Other Lending; Loans to Other Financial Institutions; Loans to Non-Financial Corporations; Loans to Unincorporated Businesses and Non-Profitmaking Bodies
3. Industry Background: RECENT HISTORY; NUMBER OF COMPANIES; EMPLOYMENT; REGIONAL VARIATIONS IN THE MARKETPLACE; Mortgage Possession Notices; Individual Insolvencies; Company Liquidations; DISTRIBUTION; HOW ROBUST IS THE MARKET?; LEGISLATION; The Consumer Credit Acts 1974 and 2006; Home Credit; Insolvency Laws; The Enterprise Act; KEY TRADE ASSOCIATIONS; APACS; Finance & Leasing Association; Consumer Credit Trade Association; Credit Services Association; Federation of European National Collection Associations; Asset Based Finance Association; International Capital Market Association; Council of Mortgage Lenders; Other Organisations
4. Competitor Analysis: THE MARKETPLACE; MARKET LEADERS; Cattles PLC; Company Structure; Current and Future Developments; Financial Results; Intrum Justitia Ltd; Company Structure; Current and Future Developments; Financial Results; iQor Ltd; Company Structure; Current and Future Developments; Financial Results; London Scottish Bank PLC; Company Structure; Current and Future Developments; Financial Results; Park Direct Credit Ltd; Company Structure; Current and Future Developments; Financial Results; Provident Financial PLC; Company Structure; Current and Future Developments; Financial Results; S&U PLC; Company Structure; Current and Future Developments; Financial Results; Other Companies; Allied International Credit (UK) Ltd; BCW Group PLC; Cash Flow Services Ltd; Controlaccount PLC; Debt Free Direct Group PLC; Inter-Credit International Ltd; JB Debt Recovery Ltd; Moreton Smith International Ltd; Philips Collection Services Ltd; OUTSIDE SUPPLIERS; Drakes Group Ltd; Equifax PLC; Experian Group PLC; Euler Hermes UK PLC; ICC Information Ltd; Kenyon Investigation Services Ltd; Regal Credit Consultants Ltd; MARKETING ACTIVITY; Main Media Advertising Expenditure; Exhibitions
5. Strengths, Weaknesses, Opportunities and Threats: STRENGTHS; WEAKNESSES; OPPORTUNITIES; THREATS
6. Buying Behaviour: MOST POPULAR SOURCES OF CREDIT; OWNERSHIP OF CREDIT AND DEBIT CARDS; HOME-COLLECTED CREDIT; OWNERSHIP OF A MORTGAGE; ATTITUDES TOWARDS CREDIT AND DEBIT
7. Current Issues: INTERNATIONAL ISSUES; A Warning by the Bank for International Settlements; US Sub-Prime Mortgage Lending Market Under Stress; THE POLITICAL SCENE; Competition Commission Opens Up Home-Credit Market to Competition; Office of Fair Trading Examination into Credit-Card Interest Calculation Methods; The Financial Ombudsman Service (Alternative Dispute Resolution Process); INDUSTRY ACTIONS; Industry Standards for the IVA Sector; Concerns About IVA Advertisements; IVA Debt Escape Route Made Easier; CONSUMER TRENDS; Increase in the Number of County Court Judgements; CORPORATE ACTIVITY; Cattles PLC; Debt Advisor Group PLC; Debt Free Direct Group PLC; Park Direct Credit Ltd; Provident Financial PLC; LEGISLATIVE CHANGES; The Consumer Credit Act 2006
8. The Global Market: GLOBAL COMPARISONS; Household Indebtedness; EUROPE; Intrum Justitia's European Payment Index Survey; THE US
9. Forecasts: INTRODUCTION; The Economy; Population; Inflation; Unemployment; Gross Domestic Product; FORECASTS 2007 TO 2011; MARKET GROWTH; FUTURE TRENDS; High UK Household Sector Indebtedness; Gross Mortgage Lending Reaches New High; Rising Interest Rates
10. Company Profiles: Cattles Plc; Intrum Justitia Ltd; London Scottish Bank PLC; Provident Financial Plc
11. Consumer Confidence: METHODOLOGY; KEY FINDINGS THIS QUARTER; THE WILLINGNESS TO BORROW; Confidence Improves; Willingness to Borrow Slips Slightly; SPENDING FROM SAVINGS; Slight Increase in Spending from Savings; Saving Grows in Relative Importance
12. Further Sources: Associations; General Sources; Government Publications; Other Sources; Bisnode Sources

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