THE amount of debt passed to collection agencies has tripled in the past six years to £21 billion, with more than 20m individual cases being handled in the past year alone.

The increase underlines the sharp rise in personal indebtedness in Britain, and a growth in the use of collection agencies to recover bad loans.

A report by the Credit Services Association (CSA), which speaks for 291 debt collection companies, found that of the £21 billion, £6 billion had been sold on to agencies for collection.

Godfrey Lancashire, CSA president, said there was a growing tendency by lenders to sell loans to collectors.

“Traditionally the work was on a commission basis � the collector would keep 25% to 30% of the debt if they were able to collect it.

“Now the growing trend is for the lender � which is normally a financial institution � to sell the debt to the collection company. They will normally buy it for around 90p in the pound, and make their margin from their success in collecting the full amount,” Lancashire said.

Debt collectors found more people were moving house in order to avoid debts.

“The survey indicates that of the 20m cases handled last year, at least 1m were ‘gone-aways’, and the figure could well be higher than that,” he said.

The debt-collection industry holds its annual conference next month. Delegates are expected to call for a relaxation on access to identity records to help them pursue people attempting to evade debt.

“The government has moved the bias too far in favour of the consumer � in this case the borrower.

“People tend to think of the losers being large, faceless corporations, but it can just as easily be a small businessman or a single mother missing out on child-support payments,” Lancashire said.

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