Collaboration is much more effective than working alone. For this reason, EOS and many other debt collection service providers have formed associations. Their aim is to provide a practicable and standardized framework of action for the industry that treats everyone involved fairly: the creditors, the defaulting payers, and the association members themselves.
- As one of the largest representatives and member of various associations, EOS helps shape the fortunes of the industry.
- The aim is to set uniform and fair standards which will be beneficial to all stakeholders.
- A further aim of the association work is to assist in highlighting the important role that the debt collection industry plays in the economic cycle.
By definition, an association is “an amalgamation of stakeholders with mutual interests established for the pursuit of common goals”. Associations can range in scope from local sports associations through to industry associations. In the latter case, companies of a guild join forces to represent their interests collectively and, in doing so, help shape the fortunes of their industry – not only in the political arena but also through the definition, certification, and monitoring of internal legal requirements and industry-wide standards.
With bank associations, this can take the form of joint standards relating to the use of digital technologies, whereas the insurance industry may position itself more clearly on green capital investments. Membership of associations is also – or especially – important in the debt collection industry, not only as a means of ensuring unequivocal segregation from unprofessional industry representatives and protecting people with excess debt from unscrupulous business practices, but also to give the industry a voice and emphasize its relevance to the economy.
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Debt collection as a key part of the credit cycle.
According to Rayna Mitkova-Todorova, Managing Director of EOS in Bulgaria and Executive Committee Member of the European umbrella organization Federation of European National Collection Associations (FENCA), EOS has a leading role to play in this process: “We are market leaders in many of the countries in which we operate. In my eyes, this means we also have a responsibility to set standards for professional business practices in these countries and to unite the industry.” The debt collection industry currently finds itself in a difficult position, she says. In her view, a controversial image and populist legislative initiatives are the driving forces behind this situation.
As a company, we share responsibility for the rules and values under which an industry operates. This is not inevitable, rather something that we can and must help to shape.
The association work helps to restore the balance between creditors and defaulting payers in Europe, which, according to Rayner, was thrown off course by a series of consumer protection initiatives, not only causing damage to the industry, but ultimately also to the creditors it represents. The formation of associations will allow them to enter into dialog, not only in the political arena but also with the public at large, among whom the debt collection industry still encounters considerable opposition. “We want to be recognized as an important part of the credit cycle and financial industry, but we will not achieve this by sitting in the ashes like Cinderella and waiting for something to happen,” says Rayna, spelling out EOS’s ambitions for the association work.
Membership in the debt collection association as a seal of approval.
Kirsten Pedd is pursuing similar plans with the Federal Association of German Debt Collectors (BDIU): “Debt collection is important for the economy, but also value-oriented and, simply put, fair.” The important thing is to act on what is said and continue to do so for the long term. This is the only way to establish and consolidate trust. With its Code of Conduct, the Federal Association has succeeded, under Kirsten Pedd’s presidency, in putting a stop to unscrupulous business in Germany, at least as far as its own members are concerned. They are committed to making their business practice fair and responsible, even surpassing legal requirements. The Code of Conduct covers the entire life cycle of a receivable, from acceptance of the collection order and communication with defaulting payers, to other obligations related to the processing of payments and the handling of complaints and queries. In return, members of the association effectively receive a seal of approval, in line with the motto: Wherever you see the BDIU name, work is being carried out to ethical and professional standards.
FENCA – or Federation of European National Collection Associations – represents the interests of the credit management, debt collection, and receivables purchasing sector at European level and coordinates exchanges with EU institutions, stakeholders in the financial services industry, consumer groups, and the European public. Today, the umbrella association comprises 23 national member associations and represents three quarters of all credit management, debt collection, and receivables purchasing companies in Europe.
The Federal Association of German Debt Collectors, or BDIU for short, is an amalgamation of over 500 companies from the area of receivables management. The BDIU members reintroduce around six billion euros into the economy each year – money that would otherwise be lost – while maintaining a constant focus on fairness and responsibility, both towards the creditor and the defaulting payer. This focus is emphasized by the association with its Code of Conduct, which sets standards for the industry that surpass legal regulations.
Kirsten Pedd holds the office of Chief Compliance Officer and Head of Public Affairs at EOS alongside her position as BDIU President. She has represented EOS in the association for 20 years. For her, the definition of a Code of Conduct not only represents a milestone for the industry but is also an obvious step: “As a company, we share responsibility for the rules and values under which an industry operates. This is not inevitable, rather something that we can and must help to shape.”
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