Debt Agencies Hire More Staff As Debt Crisis Deepens

The numbers of workers at leading debt collection agencies have been increased by over a third in a bid to cope with the worsening personal debt crisis.

Cabot Financial, which collects bad debts on behalf of HBOS, MBNA, Royal Bank of Scotland and Citigroup, has increased its workforce by 25 per cent over the past year, from 240 to nearly 300, and expects to recruit a further 100 this year.

BCW Group, another leading collection agency, now has 840 staff compared with 630 a year ago - a rise of more than 33 per cent. Intrum Justitia said the number of cases it has handled had risen by 20 per cent year on year.

TDX Group, a leading intermediary between high street banks, credit card companies and debt collection agencies, has warned that the personal debt crisis is going to get a lot worse.

Mark Oynett of TDX said the number of call centre staff dealing with people who had defaulted on their debts had increased by around 25 per cent.

"Those who think the debt problem is going to get better are kidding themselves. The number of delinquencies is rising, not falling," he said.

"Last year, banks added a lot of people to call centres to try to collect money, but that will not solve the problem - they need to come up with a solution for why people are defaulting."

Last week Lloyds TSB increased bad debt provision in its consumer division by 34 per cent to £905 million. It said it expected a further deterioration in the consumer credit environment in the first half of 2006.

Just days earlier, Barclays revealed that it had been forced to set aside £1.6 billion to cover bad debts for 2005 - up by 44 per cent on the previous year.

Personal debt in Britain stands at more than £1.1 trillion, as cheap borrowing conditions have enticed consumers to take out record levels of loans, credit cards and mortgages.