UK drivers up in arms as parking ticket firms record 63% profits

Companies that charge drivers fees for recovering parking ticket debts are operating with an average profit margin exceeding 60%. The Ministry of Housing, Communities and Local Government (MHCLG) said the figure indicates there is a "market failure", while the AA branded it "disproportionately high".

Debt recovery agencies are used by parking operators to attempt to collect money for unpaid tickets. They charge drivers additional fees of up to £70 per ticket. These charges were set to be banned when the then-Conservative government introduced a code of practice in February 2022, but this was withdrawn four months later after a legal challenge by parking companies.

Jack Cousens, head of roads policy at the AA, told the Independent: "The 63% profit margin feels disproportionately high for the services provided.

"This only highlights the need to curb the sector and ensure balance for all. There remains an overzealous cohort among some private parking operators where they hand over cases to debt recovery firms for seemingly innocuous charges."

He added that the ban on debt recovery fees in the original consultation was "the right position" and claimed the latest version "falls short of the mark".

A new consultation document setting out the current Labour Government's proposed code stated the £70 cap is "likely to be higher than can be reasonably justified" but it is "seeking further evidence".

It added that recovery agencies have "an average profit margin of approximately 63%".This is "comparable to highly innovative companies" despite the businesses involved providing "standard services such as payment plan provision", according to the document.

It continued: "We therefore do not consider them to be providing significantly innovative services, and as such the high profits may be indicative of these firms having too much control over the market, thereby indicating that there is a market failure."

Parking operators can take drivers to court if they continue to resist paying for tickets.

The MHCLG said debt recovery agencies would break even with fees of approximately £26 per ticket, if the proportion of those paying was stable.

A BPA spokesman said it "strongly disputes the Government's profit calculations" and called on it to "publish the methodology behind these figures".

He continued: "The numbers presented are misleading and fail to reflect the reality of the debt resolution sector."He insisted the purpose of debt recovery fees is "not to generate profit but to act as a fair and effective deterrent against deliberate non-payment".

An MHCLG spokesperson said: "This Government inherited a private parking market that lacks transparency and protection for motorists.

"We share their frustration, which is why our private parking code of practice will drive up standards in the industry and hold parking operators to account."We consulted on the current cap on debt recovery fees and will publish our response as soon as possible."