UK fintech Just lands court backing to undercut bailiff industry

Jamie Waller, a British businessman who founded the debt collection company, JBW Group, a fintech solutions company, Hito, and later the private equity firm, Firestarters, has founded a fintech.

Called Just, the start-up is taking aim at the – until now largely undisrupted – debt collection industry in the UK.

Just’s chairman and founder, Jamie Waller

Elsewhere in the world, fintechs have already begun tapping the space. Silicon Valley-based TrueAccord cropped up back in 2013, inDebted has been focusing on Australia since 2016, and CollectAI set up shop in Germany the same year.

Waller, known for his appearance in BBC TV show “Bailiffs”, has now decided to turn his hand to open banking.

Whilst venture capitalists (VCs) aren’t eyeing up this space, Waller – Just’s chairman – also happens to be the start-up’s VC investor.

The court ruling

The High Court ruled earlier this month that debt collection agencies can in fact seize a person’s goods virtually, rather than physically.

Just developed the technology to chase debt virtually back in June 2020, but the industry was convinced its offering was in breach of 2014 regulations.

In reality, traditional bailiffs will struggle to operate without in-person visits, which they charge hefty fees of between £190 and £425 to the debtor.

The law, which has not changed, simply needed clarifying to the industry – it never specified visits had to happen in person.

Just won’t charge for any bailiff visits, unless done in person – which isn’t the preferred method. The virtual meetings will be free, but the fintech will charge two fees, required of them by law.

One is the £75 compliance stage, which covers letters or phone calls, and the £66 court case registration fee. The fintech calls its offering “virtual enforcement”.

“The court case was a landmark moment for us,” Tom Goodwin, Just’s growth head, tells FinTech Futures. “We’ve already stimulated a lot of interest in the market. This year will be our biggest growth year.”

API-based debt collection

Just intends to use open banking to build a platform which can extract the same kind of efficiency out of the debt collection industry as other fintech-driven industries.

“We’re making a lot less than the traditional model,” explains Goodwin. “But we’re creating competition for traditional bailiffs.”

Currently, Just’s ‘virtual enforcement’ product is in beta

Just will plug into company’s data via an application programme interface (API). Built on Salesforce, it acts as a platform-as-a-service. The fintech will match the data against bureau checks to categorise firms’ customers.

“We integrate the use of external data sources such as CRA (bureau) data,” Just’s chief product officer, Antony Dear, tells FinTech Futures over email.

“Open banking data can also play a part in that […] [by] assessing a customer’s affordability based on their transactional banking data (through a consent-driven API).”

Dear adds: “Obviously open banking won’t be suitable for all customers. But as the demographic of customers in debt shifts and their expectations of digital engagement increases, my expectation is that we will see an increase in the need of open banking across the debt industry.”

Just’s technology is designed to organise repayments quicker. This is something utility providers, for example, will value at a time when many have had to forbear all their debts.

Operating on tight margins pre-pandemic, these companies will be under more pressure than ever post-pandemic to start recollecting these debts.

“At the moment nobody wants to think about bailiffs,” says Goodwin. “But as a result of COVID-19, this industry has only doubled in size.” For Just, this is good news, however the driver of such growth is largely down to a record number of unemployed people in the UK due to the current economic crisis.

The most recent unemployment rate, which is between August to October 2020, was 4.9%, according to the Office for National Statistics (ONS). That is an increase of 0.7% over the previous three months. It means that 1.69 million people were unemployed, and hence susceptible to falling into debt.

According to the UK government’s economic watchdog, unemployment is likely to reach 2.6 million in the middle of 2021. That is 7.5% of the working age population. The Bank of England made a similar prediction, with the unemployment rate peaking at 7.7% in April to June of this year.

Just’s customer segments

There are some 60 utility providers in the UK at present – the Big Six, right down to the smallest. These firms will make up one of Just’s four customer segments.

The fintech is also targeting local authorities, of which there are around 360 across the country. With council tax receipts down and parking charges falling, many local authorities can’t fund essential services.

“When lockdown finishes, they will be in shortfall,” explains Goodwin. Central government has allowed local authorities to raise council tax by 5%, but the Just executive doesn’t think this is enough.

As well as local government hubs, the start-up is also approaching central bodies such as HMRC, and the DVLA. Its fourth customer target lies in the legal sector.

Goodwin says the fintech has confirmed customers in the litigation and utility spaces. It’s also currently in discussions with potential government clients.

“We’ve completed testing using anonymised data,” says Goodwin. In a months’ time, the fintech plans to launch its ‘virtual enforcement’ offering to the market. Currently, the fintech already has more than 20 creditor customers.

Spun out of Arum

Based out of Hammersmith, Just has grown its company to around 18 employees. It also houses a number of tech-focused employees in Nottingham.

Just was spun out of its sister company of Arum, a credit management consultancy based out of the same offices.

More than 20 years in the business on its sister, Arum has been chaired by Waller since October 2017. It recently renewed a contract with Lloyds Bank.

Just is funded by both Waller’s personal VC fund and Arum group. Its future could take two different routes. One, according to Goodwin, would be an acquisition in five years’ time.

Looking at the sector’s history, there has been one notable acquisition. TDX, a panel manager in the debt collection space, got bought up by Equifax for £200 million back in 2014.

Whilst Just doesn’t cite this example, it gives a good idea of where the fintech could be headed in terms of value.

Alternatively, Waller will take it into the stock market. But it’s too early to say which is the smarter, or more profitable, route.

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