Rights To Collect £20m Of Debt Sold: What This Means For Clients, Debtors And Recoveries

Rights to £20m of debt switches hands after a collections firm fell into administration

If you outsource collections, you are not just outsourcing phone calls and letters. You are outsourcing a critical part of your cashflow engine. This week’s story is a perfect case study: a collections firm entered administration, and the rights to collect more than £20m of debt have now been sold to another agency. So what happens next, and what should UK businesses do immediately to protect recoveries and avoid compliance headaches?

What happened

* Surrey-based Redwood Collections acquired the right to collect more than £20m of debt from Essex-based Scott and Mears Credit Services, which entered administration in September 2025.

* The sale was managed by Begbies Traynor and is expected to support future collections for 178 clients across around 3,725 debtors.

* Redwood Collections is FCA-regulated and said it plans to continue collections for consenting customers, with an emphasis on compliance and data integrity.

Why this matters for UK debt recovery

1. A debt book is an asset, and it can be sold

When a firm goes into administration, administrators look for ways to maximise value. Selling the rights to collect (plus the related data and records) is one route to preserve and maximise future recoveries for affected clients.

2. Continuity is everything: data, documentation, and clarity

Collections only work when the file is clean: correct balances, clear histories, supporting documents, and agreed positions on disputes and part-payments. If the numbers or narrative do not tie out, recoveries slow down and complaints go up.

3. Notices, authority, and “who do I pay now?”

When collection rights change hands, debtors need certainty about who is entitled to collect and what is owed. If rights are assigned, the debtor must be clearly notified in writing so payments go to the right place and disputes are handled properly.

4. If it’s consumer debt, FCA conduct rules still apply

If any of the portfolio is regulated, the new collector must treat customers fairly in arrears and default, including appropriate forbearance and compliant communications.

What creditors should do this week

* Reconcile the schedule immediately

Match every account to your internal ledger: principal, interest/charges position, fees, payments received, and dispute flags.

* Confirm the legal basis for collection

Is the new firm collecting on your behalf, or have rights been assigned/sold? If it is an assignment, make sure the notice process is correct so debtors know who can collect.

* Lock down the documentation pack per account

Contract/terms, invoices, delivery/acceptance evidence, statements, comms log, dispute correspondence, and any settlement history.

* Set a compliance and comms plan

Decide tone, cadence, and channels. For regulated cases, ensure the approach aligns with FCA expectations.

* Protect outcomes on disputed or vulnerable cases

Make sure vulnerability markers and dispute notes migrate accurately, and that pursuit pauses where it should.

What debtors should expect

* You may receive a new letter or email saying collection is now handled by a different firm.

* Do not pay based on a random message. Ask for written confirmation of: balance breakdown, original creditor, who is collecting and why, and how to dispute if anything is wrong.

* If anything looks off, pause and verify using known contact details.

#DebtMatters #DebtCollection #CreditControl #Cashflow #AccountsReceivable #LatePayments #Insolvency #Administration #UKBusiness #RiskManagement #Compliance #FCA #ConsumerDuty