The mooted agency was intended to relieve pressure on banks worried about their ability to collect Bounce Back Loan debt, given the scale of the £45bn scheme. The banking industry was hoping that a single industry could ensure consistent treatment of small business borrowers and avoid a repeat of the SME lending scandals after the 2008 financial crisis, shielding individual lenders from criticism.
Although plans for a formal collection agency have been all but scrapped, talks about a looser agreement to common standards in debt recover continue, the Times understands.
And the Government has provided “recoveries protocols”, which set its expectations for how banks should behave while recovering loans. The state British Business Bank, which administers the Bounce Back Loan scheme, will also monitor collection activity.
UK Finance told the newspaper: “The detailed design of a collective approach to debt recovery is still in development. This would provide a consistent approach to the handling of outstanding Bounce Back Loans; however individual lenders may want to take their own view to recoveries.”
Further reading on Bounce Back Loan debt