Agenda About FENCA EU payment index interesting figures the reasons/the consequences Recommendations Impact on collection business Challenges.
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Agenda
• About FENCA • EU payment index
• interesting figures• the reasons/the consequences• Recommendations
• Impact on collection business• Challenges
2NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
About FENCA
48%
• Foundation: January 1993
• Seat: Brussels, Belgium
• Aims: - Protect and take care of the interests of the national member associations- Promote the development of European legislation within the debt collection industry
• about FENCA: 21 (45 Affiliate Members)1.600 debt collection agencies65.000 employees42 billions collected
• Board 5 membersAndreas Aumüller, PresidentMaria Marcopoulos, Executive Director
• please see: www.fenca.org
4NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Payment index
24
14
30
Europe
Source: Eurostat
• EU 28 Population: 503 Million
• 20 Million companies (without financial sector)
• 125 Million employees
• 24 Languages
• 28+ sensitivities
5NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Payment indexAverage payment duration andlate payment in days B2B
Source:intrum justitia-
European Payment Index 2013/KSV1870
6NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Payment indexAverage payment duration andlate payment in days B2C
Source:intrum justitia-
European Payment Index 2013/KSV1870
7NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Payment indexAverage payment duration andlate payment in days Public sector
Source:intrum justitia-
European Payment Index 2013/KSV1870
159
24
41
61
17090
50
8
4
109
80
33
20
34 27
8NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Payment indexlate payment B2B
Late payment is a „cultural thing“
10NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
late payment Reason for late payment
46%
Reason for late payment B2B
financial problems 65%
intential late payment 45%
administrative ineffieciency 43%
disputes 7%
Reason for late payment B2C forgetting to pay 53% financial problems 49% intential late payment 37% unemployment 16% disputes 10%
Source:intrum justitia-
European Payment Index 2013/KSV1870
Late payment between necessity and bad habit
The cheapest form of credit
11NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Late payment the consequences
58%
Write off increases • From 2,8% to 3,0% EU everage
• Equals the value of 350 billion Euro
• 48% say, to cut investments• 49% see no growth• 90% think, situation will not change the following
12 months
• 52% get paid on time < 30 days• 87% say, their clients face financial troubles• Get paid late causes late payment• Public sector gives bad example
Future negativ
Vicious circle
350.000 Jobs lost 2012 due to late payment!
13NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Late payment correlation to unemployment rate
46%
Source:intrum justitia-
European Payment Index 2013/KSV1870
EU Commission
3,2%
14NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Late payment Correlation to days in court (1st Instance)
46%
Source:intrum justitia-
European Payment Index 2013/ KSV1870
CEPEJ www.coe.int
0
200
400
600
800
1000
020406080
100120140
Fin
land
Nor
wa
y
Aus
tria
Sw
ede
n
Den
mar
k
Pol
and
Slo
vak…
Latv
ia
Hun
gar
y
Lith
uan
ia
Cze
ch…
Fra
nce
Por
tuga
l
Italy
Cyp
rus
Spa
in
no. days duration no. days court
15NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Late paymentcorrelation to collection costs
46%
Source:intrum justitia-
European Payment Index 2013/KSV1870
Collection Costs inSpain, Greece, Portugal, Ireland or Italy de facto not enforceable
Collection Costs easy to enforce
16NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Recommendations
48%
• There is a high degree of correlation b/t speed in court and late payment in a
given country: speed up the court process
• There is a high degree of corelation b/t cost for late payment (collection cost) days payment late: put or leave high collection cost in place
• there is a high degree of correlation b/t late payment of public and private sector: Public sector – pay on time!
• Availability of bank credit is important: implement measures to stabilise and incentivise banks
18NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
resent impact on collection business
Harmonization of Consumer rights
Late payment directive 2011/7/EU
- Between businesses (B2B)
- Public authorities (PA)
- Not for individuals (B2C)
Reform on data protection legislation
19NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Impact on Collection Business
• Norway 2011
o 50% less collection costs
• Nederlands 2012
o New regulation based on the late payment directive
• Norway
• Nederlands
• Germany
• Austria
• Austria
o On the agenda 2012/2013 with no result
• Germany
o Old „system“ put into regulation after 2 years of uncertainty and heavy work
20NAPCA, „Debt Collection Market – Trends and Prospectives, 14.11.2013 Walter Koch, FENCA/KSV1870
Challenges
• Implement rules/regulations/codes of conduct for collection agencies and execute them
• Collect as much data as you can
• bundle force - get together with other agencies
• Use the collected data for political and press work
• Convince Authorities that collections agencies are important in fighting late payment
• Convince Authorities that late payment is a damage for delay and thus the one who caused the damage - even it is a private person – has to bear the costs (interests and recovery costs - creditor’s as well as the one from collection agencies or lawyers)
• Try to get involved in the law making process
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