My understanding is that CCP collects most of its PDL's in years 1 and 2 and continues to collect all the way out for about 6 years. Obviously doubtful debt provisions are utilised in the last few years when a debt eventually becomes uncollectable.
CCP does not follow through with legal action preferring to make payment arrangements early on as well as educating customers on managing oustanding debts.
Many of the cusomers of inhouse short term credit provider Wallet Wizard are clients formerly on payment plans that have managed to turn around their credit position. The detailed insights into CCP's own clients allows it to successfully lend to these clients and is a key reason why Wallet Wizard is a success without causing angst to its clients and angst to regulators who monitor that part of the credit market.
It appears that the PDL market in A+NZ is short on arrears to sell into the likes of CCP however growth in Wallet Wizard and the US market will make up for that.
As in all economic cycles the PDL's will come back especially now that the BNPL business model has been broken by a return to a more normalised interest rate environment albeit still lower than historical levels.
The real question mark for CCP investors is: do they sell out now and swoop back in when the PDL market returns or do they hang on and already be in a position to benefit from the reversal off a the share price which is currently experiencing sustained downward pressure?
I suspect investors might start jumping ship in droves not willing to wait for the upturn as its timing is quite uncertain.
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