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Why are the response rates to High Court enforcement demands so low?

04 May 2020

We are frequently told that by the time a debtor gets to enforcement, nothing will make them engage other than a visit, a knock on the door. The data however does not support this.

Why does everyone keep saying that letters do not work?

Post-litigation enforcement, and specifically High Court, requires a Notice of Enforcement to be sent to a debtor before the Enforcement Agent visits. Traditionally, these notices have returned engagement rates of <3%. Why is this, considering in civil enforcement (the enforcement of Council Tax and Parking Penalties) the same notice attracts response rates of >8%? The only logical answer is that the notice is not being received.

This hypothesis is also supported by the amount of complaints that are made where the debtors say they did not receive a demand.

If, for example, only a subset of debtors receives the notice, then the headline success rate of 3% is actually quite good.

In this example, 3 out of 30 people respond to letters received, which is a success rate of 10%.

 Case study – the use of tracked mail

As an organisation that represents some of the industry’s largest creditors and also employs the services of several enforcement businesses, Just manages the compliance stage of the enforcement process in-house. We do the data append, send the demands and then we instruct a traditional enforcement company to visit where and when a visit is required.

In the development stages of our business, we made the decision to send all Notices of Enforcement by tracked mail. We thought that ensuring the debtor gets the demand and an opportunity to pay with just an additional £75 of fees was an important part of the value we could bring to our clients. This simple change delivered an increase of industry-average response rates of over 280%.

Is this a Royal Mail postal issue?

It is easy to blame Royal Mail; let’s face it, they have been blamed for years for losing mail. Personally, I can't remember the last time someone said they wrote to me, and I did not receive it. Maybe I am just lucky, but I doubt it.

The response rates from traditional postage versus the tracked mail solution Just delivers, gives support to taking some time to question what is going wrong.

What we could do to investigate, fix and carry on: Test ten cases using tracked mail

In the space of 14 days, we would be able to review the response rates of the ten demands that were sent using tracked mail versus the response rates from the ten sent previously. If the tracked mail delivers a better response, then set response targets in that range for all cases processed from there on.

How can we improve success rates?

Just does many other things to improve success rates including using behavioral insights and data append. We don’t believe however that these additional innovations are the reason for our ~300% increase in success at getting a response.

It would cost a supplier about £50 to send ten letters using tracked mail. Considering they are paid a minimum of £750 for processing these cases, it seems a small cost to test something that could add significant value to the debtor’s journey and ability to pay.


Virtual Panel Discussion - 6 May

We will be hosting the first in a series of panel discussions about the impact of COVID-19 on the utility sector including results from a recent YouGov survey we commissioned. 

Find out more and register here


Just.

To find out more about the professional layer Just adds to the most powerful of collection route of post litigation enforcement, please email nj@just-dm.co.uk or schedule some time in his diary to discuss.


About the Author: Jamie Waller

Jamie Waller
 is an entrepreneur, investor, author, and philanthropist. In 2018 he was awarded the prestigious Cranfield Business School, Entrepreneur of the Year and has been responsible for the formation, development, and sale of two previous businesses in the financial services industry.

Jamie is the Chairman of the Arum Group of companies.