Alistair Houghton meets CAROLE HUGHES, managing director of Daniels Silverman

THE words “debt collector” can send a chill through the heart of many a hardy soul.

But Carole Hughes, managing director at Daniels Silverman in Liverpool, is determined the debt collection industry should be seen as a vital part of the business landscape.

Daniels Silverman collects debts for companies across the UK, with clients ranging from small decorating firms to financial institutions.

Hughes, a former pupil at Merchant Taylors’ School in Crosby, admits that many people still think of debt collectors as “hard-nosed thugs with baseball bats”.

But, she says, the industry today is more professional than it has ever been – and plays a vital role in protecting small businesses by ensuring they can recoup the money they are owed.

“This is a necessary service for businesses,” she said.

“We get so many clients on the phone in tears, saying that if their debt doesn’t get paid then their business will go under or they’ll have to make staff redundant.

“If we can recover their debt and keep jobs safe, that’s great.

“The national view is that debt collectors are bully boys. That’s not what Daniels Silverman is about.

“If you supply goods or services to another business and someone won’t pay you, that’s where we can help.

“We’re chasing cash flows to keep business moving. We’re a valuable resource that businesses need.”

Hughes also wants to educate businesses about the importance of protecting their cashflow.

“If somebody has a really good idea and sets up a business,” she said, “they’re really focusing on the sales side. They tend to forget the back end and the collection side.

“We always say a sale is not a sale until it’s paid for.”

Daniels Silverman’s work is divided among three teams.

Firstly, it has a team specialising in collecting debts on behalf of small businesses. Each client has its own dedicated adviser.

The company’s second arm, its corporate team, works on behalf of large financial institutions, collecting debts resulting from asset finance deals.

It chases money in situations where, for example, a business that used asset finance to buy a piece of equipment has since been sold.

“The team loves this kind of work,” said Hughes. “It involves issues such as tracing ownership, and uses a lot of investigative skills.”

Finally, Daniels Silverman carries out some consumer collection work on special projects – what Hughes calls “high-volume, low-value work”.

That includes work for a rail operator to collect penalty fares.

It is also working with the British Oil Security Syndicate (BOSS), the body that represents petrol station owners, to recover money from people who fill up with petrol before revealing they cannot pay for it.

“These are people who have gone to a petrol station, filled up, then innocently realise they can’t pay – perhaps they’ve forgotten their purse,” said Hughes.

“We have developed a system where they’re given a form and have seven days to pay. If they don’t pay, it comes to us to chase.”

Next, Daniels Silverman will work with BOSS on a more complex project – tracking down those who fill up and drive away without paying.

Hughes’s first job was in Germany, where she moved with her husband after he got a job as a civilian IT contractor with the US Air Force.

“Effectively, the only job for an English-speaker was secretarial on an air force base,” she said. “So I bought an old-fashioned typewriter and a typing instruction book, and for two years I was secretary to a major in the US Air Force.

“It was an exciting place to work. At lunchtime we’d take our sandwiches and go to watch F14 Phantoms taking off and landing.”

After two years the family returned home. Hughes took a job at a solicitors’ practice and began studying for the Institute of Legal Executives exams.

Eventually she moved to law firm Thomas Higgins in Wallasey, where she spent 13 years. When she joined, Thomas Higgins was a general practice, but it soon refocused and began specialising in debt collection.

Next, Hughes joined debt collection firm Intrum Justitia as commercial manager. The Swedish group was looking to expand its Liverpool-based commercial arm.

But when Intrum moved its commercial arm to the Midlands in 2000, Hughes – who by then had two children – decided she would rather stay in Liverpool.

“Daniels Silverman was very small and very different,” she said. “But I thought I’d give it a go – so I came here as litigation manager in 2000.”

Daniels Silverman was founded in 1995. It had neither a Daniels nor a Silverman as a director – its name was designed to ensure the fledgling firm sounded like a reliable professional services business.

In 2003 it was bought by Harnage Estates, which is owned by the Scott family – which used to own Scott’s Bakery in Netherton.

Harnage was looking for a cash-rich business to supplement its portable building company Portable Offices (Hire).

The company invested in its IT infrastructure. Now everything is stored electronically, with all letters scanned and saved on the system and originals securely shredded.

One wall of the company’s office is still lined with ring binders – the legacy of a contract to collect debt from a pub and bar chain – but the contents have now been shredded.

“When I started here in 2000, all the walls were covered in filing cabinets,” said Hughes. “We had a team of 12 office juniors just trying to find things.”

Daniels Silverman is encouraging debtors to pay online, though many still choose to pay by cheque or postal order. Some even still pay cash – which is why every day two Daniels Silverman directors witness the opening of the post to ensure all money is accounted for.

Hughes, who is married with two sons and lives in Wirral, became managing director in 2005.

The recession has been a mixed blessing for Daniels Silverman.

“We are experiencing higher levels of trade,” said Hughes, “but it’s more difficult to collect because there isn’t the cash in the economy. There are more insolvencies.”

Hughes is also finding that large financial institutions are now taking debt collection in-house as they look to recover desperately-needed money even more quickly.

But at the same time, other businesses who ignored unpaid debts when times were good are now recruiting firms such as Daniels Silverman to bring in the cash.

Today, the company employs more than 50 people. It is based in the Queen’s Dock Business Centre, in the Baltic Triangle – a low-key location, but one with space for the company to keep growing.

“We’re really passionate about this business,” said Hughes. “We want to make it the biggest business of its kind in the country.

“We want growth. But we want to do it in a structured way. We don’t want a drop in service levels.

“We’ve seen other companies grow rapidly and come unstuck because client satisfaction has fallen.”

One way Daniels Silverman tries to please its clients is by trying to resolve disputes between them and their debtors .

Hughes said: “What we’ve found, particularly with small businesses, is that debt becomes personal. It gets to the point where a client won’t speak to their debtor.

“We are in the middle, and we can evaluate the case.”

Outside the office, Hughes enjoys cycling and walking, and still tries to go to blues-rock concerts when she gets the chance.

And, everywhere she goes, she tries to tell people that debt collectors are not always the bad guys in business. Sometimes, however, that can be hard work.

“It’s great at dinner parties,” she smiled. “You say you’re a debt collector and everyone jumps.”