A leading Credit Reference Agency recently shared data to show where ‘Financial Vulnerability = High’ debt recovery rate is less than 10% and where ‘Financial Vulnerability = Medium’ debt recovery chance is less than 23%
This is compared to people with no indicators of financial vulnerabilty, where the recovery rate is over 62%.
The research also demonstrated that individuals with high financial vulnerabilty are more costly to service, with less than 4% of outbound calls answered and less than 0.25% of calls with a successful payment outcome.
As a Debt Purchaser, you will want to either (i) exclude people identified as financially vulnerable from your purchase, or (ii) pay less for those people.
Using data from Data On Demand, you can identify these types of individuals and use your new knowledge to negotiate a better portfolio purchase price with the seller.
Ask yourself how you could improve ROI if you reduce the purchase price by 5%-10% and save operational costs from data where successful payment outcomes are less than 0.25%?
Data On Demand have data for 1,000,661 Highly Financially Vulnerable people – individuals identifed using the FCA’s characteristics of vulnerability within the last 30 days, and data for 1,149,758 Currently Financially Vulnerable people who have experienced financial difficulties in the past 12 months.
You could identify more than 1,000,000 people with potential collections success of under 10% and a further 1,000,000+ with collections success of less than 23%. This is powerful information to enable to you to highlight data that will not provide the best ROI.
Data On Demand can enable debt purchasers to carry our pre-purchase analysis to help negotiate a reduced price based on the number of financially vulnerable individuals in the file.
Unlike the CRA’s data, this information can be applied to any individual – they do not need to be an existing customer.
Data On Demand work with Debt Purchasers to find new and innovative ways to maximise the return on investment from their debt purchases and ensure the best outcomes for their customers. Our services include pre-purchase analysis, vulnerable customer identification and enhancing contact information.
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