Full outsourcing of collections and recovery in the motor finance space has been underserved for years. Having received regulatory authorisation from the Financial Conduct Authority (FCA), Chartsbridge aims to solve that.
Although Chartsbridge is a new entrant to the market, the people behind the venture will be very familiar to motor finance lenders as well as many of those involved across the collections and enforcement sector.
John Ingram – who founded Burlington Group in 2009, which was purchased by judicial services group Marston in 2015 – is leading the project alongside Andy Thomas. Thomas recently left sub-prime car finance lender Moneybarn, where he was customer operations director, to help set up Chartsbridge.
Their aim is to provide the first unified motor finance collections and recovery outsource service in an otherwise fragmented marketplace, with their services available to clients on a modular or a full partnership basis.
Prior to 2014, Ingram explains, the market was served by a large number of small collections and recovery providers. “What we saw in the period prior to the FCA taking over regulation of consumer credit firms in 2014, was a motor finance space that was poorly serviced. In recent years, the new regulatory environment has created a smaller number of more professional businesses in the sector,” says Ingram.
However, Ingram goes onto say that there has also been a cycle in the last five years, and not only is the market now primarily made up of niche operational specialists, but there is now a lack of ongoing investment and innovation.
Although the supplier market has professionalised, it has left the sector’s lenders without a credible full-service motor finance collections and recovery outsource provider. Having seen the competition restrictions that applied to him following his ale of Burlington Group expire in 2019, Ingram feels that there is a strong market appetite for a unified and modular service offering.
The major debt collection agencies and enforcement businesses do not tend to cater specifically for the motor finance sector because of the attendant sector complications and specialist regulatory requirements.
“After my post-sale restrictive covenants expired, I began to re-engage with senior stakeholders in the motor finance sector. It came across to me very quickly that although the remaining collections service providers have enjoyed a period of growth in the period of consolidation since 2014, there is also a paradoxical complacency that has set in. There is a lack of fresh innovation and investment amongst the motor finance collections and recoveries supplier pool, and an opportunity for a dynamic and innovative provider offering a full-service collections and recovery outsource offering across the entire post-arrears collections lifecycle.
“The wider debt collection space is clearly extremely well serviced by long established and highly sophisticated providers that cater right across the market from mortgage arrears servicing into unsecured financial services spanning cards, loans across into utilities and telecoms” he adds. “But none of those providers specifically service the motor finance sector and, even if they identified it as a target market, it’s a specialist sector and I’m not sure it would work for them.”