High Court Enforcement Officers (HCEO) versus Debt Collection Agency?
Should you use a Debt Collection Agency or High Court Enforcement Officers (HCEO)?
What are the pros and cons?
These are both great questions!
The simple answer is, it depends on your needs as we will go on to explain.
In this article, we'll talk about the factors that will dictate the reasons you will need to consider before instructing a debt collection agency or High Court Enforcement Officers, the questions you should be asking when deciding which one to use, and general price structure as to what you'll likely spend. And by the time you're done reading this, not only will you have a clear sense for budget, but you'll finally be on that path of getting your debt recovered –and be well informed! Let's dive in.
So, just to be upfront and to clarify...
No Collection, No Commission
No Contracts to Sign
No Upfront Payments
No Monthly or Annual fees
Commission Rate Agreed Upfront
Commission Rates From 5% (Lowest Industry Standards)
No Additional Costs Unless Approved By You
We will start with the easy bit first… Whichever you decide to use, ensure that they are regulated by a professional body. For High Court Enforcement Officers this would usually be the High Court Enforcement Officers Association or HCEOA and for debt collection agencies this would usually be the Credit Services Association or Financial Conduct Authority.
Typically, High Court Enforcement Officers do not do pre-litigation debt collection and would only deal with cases once a county court judgment (CCJ over £600) has been obtained. High Court Enforcement Officers are ‘Officers of the Court’ and are used in enforcing possession orders, High Court Writs or evictions. High Court Enforcement Officer fees are usually fixed as set by the court however for ancillary services they may have a different charging structure. Their fees are usually payable upfront. A Debt Collection Agency cannot do what High Court Enforcement Officers can do neither do they have the powers to do so. It’s like comparing apples with pears. The services of High Court Enforcement Officers compliment those of a Debt Collection Agency should it be required. High Court Enforcement Officers would usually charge either up-front fees or an hourly rate, commission or fixed fees per stage (or all of the above depending on the task at hand) so whether your debt is collected or not, you have still paid up-front for a service but that is no different whether you use a Debt Collection Agency that instructs a High Court Enforcement Officer or if you go direct to a High Court Enforcement Officer.
If you already have a county court judgment (CCJ) and you know what type of action you require then it may be more cost effective to go direct to a High Court Enforcement Officer. The difference here is that a Debt Collection Agency will recommend other options outside of the scope that a High Court Enforcement Officer can offer based on the individual circumstances of each case so you can make an informed decision.
That said, most reputable Debt Collection Agencies will have partnerships with High Court Enforcement Officers, and in turn would instruct a High Court Enforcement Officer because it is an extension of the service they provide i.e. to enforce a High Court Writ on behalf of the creditor.
Debt Collection Agencies tend to operate on a No Collection, No Commission basis (or No Win, No Fee – see our other article about the difference between these two types) which means they only get paid commission upon successful recovery of your debt.
Who has more authority, a Debt Collection Agency or High Court Enforcement Officers?
As previously mentioned, they cannot really be compared because they manage different aspects of the debt collection process but work well together. In both instances they are considered to be third parties and therefore the psychological difference is virtually the same. That said, having a High Court Enforcement Officer knocking on the debtors door whilst enforcing a High Court Writ may have a bigger impact but you need to obtain a County Court Judgment first and then instruct the High Court Enforcement Officer. This is where a Debt Collection Agency can come into play because they can manage the entire process for you and link up with solicitors and the High Court Enforcement Officers to get the desired outcome without you having to instruct multiple parties.
A case can escalate from a debt collection agency to a solicitor’s law firm in order to obtain a county court judgment but very rarely, if ever, is it vice versa. Therefore, you can have best of both worlds by going via the debt collection agency first and then escalating to a solicitor’s law firm to get your county court judgment.
Once you have obtained the county court judgment, only then can you instruct High Court Enforcement Officers to enforce a High Court Writ. The downside in this approach is time and money but remember you will not have paid any commission to the Debt Collection Agency unless your debtor has paid. Unfortunately, you may be forced into this route by the debtor due to non-payment but your only other option would be to write off the debt and simply ‘walk away’.
Pre-litigation debt collection can save you time and money. Whilst it should always be the objective to avoid litigation and High Court Enforcement, sometimes it can be unavoidable therefore forcing you into a time consuming and expensive process. On the other hand, the mere threat of litigation can prompt your debtor into paying or entering some kind of negotiation.
Does a High Court Enforcement Officer have more powers than a Debt Collection Agency?
Yes, but only if they are enforcing a High Court Writ. Without a High Court Writ, they are no different to you or me.
High Court Enforcement Officers are ‘officers of the court’ and they are the only people that can execute High Court Writs on behalf of a creditor whereas a Debt Collection Agency cannot execute a High Court Writ. That said, a High Court Enforcement Officer cannot execute a High Court Writ without a county court judgment being obtained first so as we can see, a High Court Enforcement Officer works in tandem with a Debt Collection Agency.
To find out more about the detailed process of a High Court Enforcement Officer see our article 'What is a High Court Enforcement Officer (HCEO) and when can you use a HCEO?'
Most reputable Debt Collection Agencies will have partnerships with a High Court Enforcement Officers to obtain a county court judgment and then issue a High Court Writ on behalf of the creditor. So, in answer to the question, it is not unusual for both to work side by side.
Top 3 Debt Collection Agencies in the UK - We will cover this in a separate article which you can find here.