Weekly Blog by Philip King, CEO of the ICM - 'Standing tall and proud'

When I said in my blog last week that it was time for credit professionals to stand up, to be noticed, and to be proud, I was talking about the value they contribute to their organisations and to the wider economy. I'm glad to say that I'm seeing a trend that exemplifies the pride I'm talking about.

I've noticed an increasing number of ICM members who include their designatory letters - AICM, MICM, MICM(Grad), or FICM - on their business cards, their email signatures, their LinkedIn profiles, and elsewhere. These letters are not just given away when someone becomes an ICM member; they have to be earned by gaining qualifications and/or having their practical experience verified, validated and reviewed.

Some might say the practice is archaic but I believe those who have earned them should be proud of their achievement and are right to use them in this way. If you don't tell people what you've achieved, who else will?

I've also seen a marked increase in the number of ICM members wearing the ICM badges we launched earlier this year. This, too, is a good way of promoting your professionalism and - if you don't have a badge - simply email icmmembership@icm.org.uk and we'll be delighted to send you one.

Don't be a shrinking violet!

Weekly Blog by Philip King, CEO of the ICM - 'Men behaving badly'

The ITV 'Exposure' programme aired on Monday night used covert recording of a bailiff behaving very badly indeed. Shocking revelations that - in many respects - beggared belief. What was even more surprising was the assertion that no complaints had been received by his employers during the three years he had worked for them. Was this because the people he called upon didn't know their rights or what standards of behaviour they could expect? Or was it because they felt that any complaints they did raise would simply fall on deaf ears?

If the Tribunal, Courts and Enforcement 2007 had been fully implemented, the bailiff concerned would have been subject to an enhanced certification process that would have included aspects such as diversity awareness and conflict management; both would clearly have been useful, and complaints would have been dealt with by the Courts. As events have unfolded, the Act was only partially implemented and a parallel consultation proposing regulation instead by an independent body was never taken forward either, even though the enforcement industry would have welcomed such an additional regulation (my thanks to Chris Bell of Shergroup for his validation of the facts here).

I've been involved in meetings with various bodies and the Government for several years discussing the proposals and alternatives interminably but - as has frequently been highlighted in the credit press - no progress has been made and the issues remain. I don't believe the problems are endemic, but it only takes one bad apple to spoil the whole barrel and damage the reputation of the entire industry. The reality is that bailiffs are only acting to recover money that is the subject of a warrant issued by the court and is rightfully due, yet that fact gets lost in the noise of behaviour and attitudes that can't be condoned. They also get confused with the world of 'Lock, Stock and Two Smoking Barrel's' that is as far away from professional enforcement as it is possible to be, but make for a good photo-caption!

Self-regulation is not a viable option unless and until it is carried out in a much more rigorous way. I've been encouraged by recent initiatives like the 'video recording badges' being piloted by some Marston High Court Enforcement Officers. I don't know how feasible such measures would be on a widespread scale but technology like this would allow for closer monitoring of activity and would help rebuild confidence. The last thing we need is a belief that enforcement of warrants is unfair.

Weekly Blog by Philip King, CEO of the ICM - 'The changing 'Face' of Debt Guidance'

Since mentioning the publication of the new OFT Debt Collection Guidance in my blog last week, I've now had chance to look through it in detail. No great surprises; it's very similar to the draft on which we were consulted some time ago and says what I guess we'd all largely expect it to say. It is, after all, only an update of the version of the document issued in June 2003.

The aspect that seems to have caused the greatest debate on the ICM Credit Community LinkedIn group, and elsewhere, is the OFT warning to debt collectors not to use social networking sites such as Twitter and Facebook to pursue people who owe them money. I don't want to be pedantic here but I'm not sure that's exactly what it says. Actually what it says is that unfair or improper practice would include 'acting in a way likely to be publicly embarrassing to the debtor...' which includes, as one of the examples quoted 'posting messages on social networking sites in a way that might potentially reveal that an identifiable person is being pursued for the repayment of a debt'. That's a long way from banning the use of Facebook!

I might be showing my age here but I remember lecturing ICM evening classes at Watford College in the 1980's and recall teaching about s40 of the Administration of Justice Act 1970 which addressed the unlawful harassment of debtors and included the works: 'A person commits an offence if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he harasses the other with demands for payment which, in respect of their frequency, or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation'.

So nothing has changed really; in those days, the example of harassment was parking a van outside someone's house with the words 'debt collector' written on the side. Surely all we're talking about here is the 2011 equivalent? There's nothing wrong with using social networking tools to find people or to learn more about them but harassing people by any means is - and must be - unacceptable. Those who have seen me present using a baseball bat as a visual aid will know that such a bat is an equally unacceptable collection tool!

I am intrigued by the following words in the Foreword: 'This guidance document is not intended to provide a basis for debtors to avoid the repayment of debts duly owed. We consider that debtors should take responsibility for engaging appropriately in the debt recovery process...'. On the one hand, I am encouraged by its inclusion; on the other, the fact that they have to write these words at all makes me think that the document is weighted heavily in favour of debtors. We shouldn't lose sight of the fact that taking on debt carries with it an obligation to repay it, and that should always be the starting point.

The Guidance carries considerable detail and Consumer Credit licence holders would do well to read it and ensure they, and any third party organisations working for them, are complying with it.

Weekly Blog by Philip King, CEO of the ICM - 'Recent days have held mixed emotions - first driven by our government and, secondly, by my family'

Francis Maude announced a few days ago that the Government would name and shame prime contractors who fail to pay suppliers within a 30-day limit. The Prompt Payment Code was established by BIS to encourage best payment practice and by definition expose those whose behaviours might be open to question, and here is a classic opportunity to promote its existence by insisting that suppliers sign up to it. It certainly needs more publicity and this would have built on the work we're doing with BIS; instead an initiative is launched that demonstrates a seemingly lamentable absence of joined-up thinking across government departments.

A day or two later, I attended a stakeholder meeting with the Insolvency Service looking at proposed changes to the rules surrounding pre-pack administrations. Having held a number of forums, the policy team had decided to meet with stakeholders again in smaller groups to inform a 'period of reflection' before deciding on the best way forward for the detailed implementation. I was greatly encouraged by what is a rational and sensible approach that will - I hope - lead to a better outcome than would have resulted from rushing ahead regardless.

On the personal front, I recently attended a family funeral that was both poignant and sad reminding me of the uncertainty of life and the future, and bringing things into perspective. On Saturday, my daughter is getting married and this will surely be a day of pride, happiness and, yes, some tears too I suspect!

After the weekend, I'm off for a few days post-wedding recovery in the North West so I've asked Rob Beddington, the ICM's Director of Commercial Relationships, to share some thoughts with you next week, and I'll be blogging again on 18 August which, coincidentally, is the day of the next ICM Regional Roadshow at Cutlers' Hall in Sheffield. If you're in the area, I hope I'll see you there.

www.icm.org.uk

Weekly Blog by Philip King, CEO of the ICM - 'You tell us'

The ICM UK Credit Managers' Index for the second quarter of 2011 is now well underway and responses are coming in. If you haven't responded yet, there is still time and you can do so at http://svy.mk/j6zyU6.

When we launched the Index last year, we wanted to create something that would provide regular insight into the thoughts, attitudes, and levels of confidence of UK credit professionals.

Nobody is closer to customers - their behaviours, their financial strength and their financial weakness - than a good credit professional. When we know our customers as we should, we are often able to see the signs of trouble looming well before our peers from other parts of the business. In the same way, we are aware of, and more sensitive to, changes in general activity and across the wider economy.

It is unusual for me to make much mention of the ICM in my weekly blog but our members are vital players in delivering value for their businesses. Their opinions are relevant and perceptive, and combining their insight into a serious Index provides a really good barometer of where the country's economy is heading.

The ICM is a community of credit professionals; we speak for that community and the importance and relevance of credit management is being recognised more and more by government, business organisations, and businesses themselves. The Index is an output from the credit community and, if you haven't already done so, please take 3 minutes to have your say now.

Weekly Blog by Philip King, CEO of the ICM - Merlin hype misses the point

There has been plenty of hype this week with regards the banks seeming to miss their quarterly lending target to small businesses. They agreed to lend £76bn to SMEs this year, equating to £19bn per quarter, and the £16.8bn achieved to date leaves them 12% short http://www.bbc.co.uk/news/business-13489884.

I am conscious of not wanting to repeat earlier rants but there are one or two points worth mentioning. Firstly, you obviously can't assume one quarter is going to be the same as the previous one, so to simply multiply by four is naive. Secondly, the agreement was only announced in February when we were already well into the first quarter. Thirdly, and acknowledging that I am repeating myself, it's nonsensical to 'force' banks to lend.

The granting of credit is based on trust that the supplier will deliver the goods, services, or funds required, and that the customer will pay in accordance with the agreed terms. Banks, just like trade creditors, need to set their lending policy and criteria in order to maximise sales and profit while maintaining risk at an acceptable level. It was lending too much to customers who were insufficiently credit-worthy that contributed to the credit crunch in the first place both at a local and global level.

The 'disconnect' between the views of the banks, government, and business organisations remains, and the media takes the opportunity to exploit the differences at every turn. I for one wish we could see a more cohesive message being delivered to business. They should be more prepared to share information about their business so that lending decisions can be better informed; they should recognise that there is often cash (debtors) sitting in their business that could be released by applying good credit management principles; and they should consider other financing options beyond a loan or an overdraft.

And as for the government - and again as I have said before - they need to stop promoting the reduction of financial reporting under the misnomer of reducing red tape. Numbers still have to be produced so red tape is, at best, a fragile argument. Less information will result in less credit. It is a simple equation.

On that subject, the ICM 30-second survey has just gone live. Please let us have your views here.

Next week will be another guest blog by CreditManagement magazine's Managing Editor, Sean Feast, and I'll be back the week after.

Weekly Blog by Philip King, CEO of the ICM - 'Debt management - we need disclosure'

The OFT made an announcement last week that followed its warning to 129 debt management firms in September last year that highlighted serious issues over compliance.

It confirmed that 35 firms have surrendered their consumer credit licences and at least 15 are facing licensing action as a result of the OFT's compliance review. In detail, since the warning was issued: 35 firms have surrendered their licences; 8 firms have been informed that the OFT intends to revoke their licences; a further 7 companies who did not respond are currently being investigated; and 79 firms have submitted evidence, which the OFT will now review.

One of the footnotes to the official news release says that: 'the OFT is not able to name the companies subject to the announcement because of disclosure restrictions under Part 9 of the Enterprise Act 2002. Where the OFT uses its formal powers under the Consumer Credit Act 1974 to refuse or revoke a credit licence, decisions are made public on the Public Register'.

I understand the principles of disclosure but it seems to me perverse that the public cannot know the names of the companies involved so that they - and their advisers - can be wary of dealing with them, particularly where the OFT plans to revoke a licence. It has now been four months since the initial announcement, which means at best there are still many debt management companies behaving unethically or worse. (By the way, I thought I'd look at Part 9 of the Enterprise Act to see what the restrictions were and I'm still ploughing through the 18 pages of guidance notes!)

To more positive news, I am delighted to see our Managing Cashflow Guides passed 200,000 downloads in January. I appreciate there are an estimated 4.7 million businesses in the UK but at least a proportion of them are downloading good advice that can help them manage cashflow more effectively.