National Australia Bank has appointed an enlarged panel of debt collectors in an attempt to improve recovery rates and stem regular consumer complaints about its collection methods. Four agencies have been told that they have been successful in tendering for the Bank’s outsourced debt or “contingency” collection work. The winning agencies are listed companies: Credit Corp Group, RMG and the privately owned RCL Mercantile and Austral Mercantile.

A dozen other collection agencies participated in the tender, but were unsuccessful. The new panel of collectors replaces NAB’s previous practice of employing just two firms, RMG and Dun & Bradstreet Australia. The bank uses third parties to collect consumer debts – on credit cards, mortgages and personal loans – that are more than 180 days overdue. Previously some sections of the industry have been critical of onerous performance conditions imposed on debt collectors by large financial institutions such as the banks, contributing to low profitability in the sector.

In addition to appointing the new panel, NAB had installed “best-practice” web-based technology (ASSETrms Technology) that would give the bank and collection agencies real time access to information on debt-owing customers, head of collections, Peter Vincente said. The bank’s collections division would now be able to closely monitor an agency’s work and the agency would have access to better information. “This kind of technology has been in play for three to five years in the US and Canada and its starting to be used in Europe,” Mr. Vincente said.

The new system also means that collected debt does straight to the bank, rather than being held by the agency, and the agency is directly forwarded it commission. NAB – which has liaised with credit counseling groups on the new system – also hopes the system will enable it to better deal with genuine hardship cases, helping it to protect its brand and retain customers as they emerge from indebtedness. Better information flows between the agency and the bank may make it easier to deal with cases in which the agency contacts a customer seeking debt repayment only to be told the customer disputes the debt or claims to have already come to an agreement with the bank.

Mr.Vincente said the new technology would promote a “step change” in the industry as other credit providers adopted the same technology .Credit Corp chief executive Simon Calleia said it was a “Good model for both parties. From our side, we have greater access to the bank’s information, so that it makes our job a little bit easier”.Credit Corp reported last month an interim net profit of $3.9 million, a rise of 66 per cent, but other listed agencies have reported mixed results. RMG’s appointment to the NAB panel, for example, comes after it last month reported a first-half new loss of $6.6 million. Former Consolidated Press finance director Don Bourke became RMG’s executive chairman in September and since then; the company has raised $16 million in equity to improve its balance sheet.