Project to dismantle a Covid-19 debt collection agency

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Plans for a formal collection agency for Covid-19 loans are said to be scrapped.

According to Time, the plans have all but been scrapped, leaving debt collection to lenders, while discussions on a looser agreement on common standards for debt collection resume.

Last year, UK Finance launched a feasibility study on creating a vehicle that would oversee debt collection on behalf of lenders participating in the rebound loan scheme, to ease the pressure on banks.

According to Time, one of the reasons for dropping collection agency projects is that interest repayments are expected to start in May for the rebound loan program, so it would be complicated to set up a new agency in a short period of time. time.

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It was hoped that a single agency could have ensured that there was uniform treatment of borrowers.

The National Audit Office predicted that £ 31bn in loans taken out under Covid-19 support programs will need to be written off.

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