Large numbers of outstanding credit card debt and mortgage debts held by individuals in the UK is leading to busy times for collection agencies, it has been suggested.

This is the view of N Brown, a home shopping group which owns catalogues through which people can order goods.

The firm said that, despite a recent like-for-like sales rise of 8.8 per cent, its actual margins have shrunk by 1.5 per cent.

While the contraction is partly due to a general rise of bad debts as customers fall behind on payments in the general downturn, the role of collection agencies was also a factor.

Speaking to the Guardian newspaper, N Brown chief executive Alan White indicated that some firms were prioritising more lucrative debts at the expense of smaller jobs among catalogue shoppers.

Previously, debt collection agencies were paying a higher rate in the pound - and paying upfront… but they are awash with higher value debt to collect such as mortgage arrears or £2,000 credit card bills,

“Also, because the risk of collection has gone up, they don’t want to pay up front, they want to pay a proportion of what they collect. It has shifted from a sellers’ to a buyers’ market.”