+44 (0) 191 217 0775
The Credit Services Association (CSA)
Blog: Making progress on vulnerable customers in debt collection - does it require a change in the law?
John Ricketts is Vice President (soon to be President) of the Credit Services Association.
“Too much game planning and not enough action” was the accusation levelled at experts on the vulnerability, mental health and debt collection panel at the UK Credit and Collections Conference #ukccc last month by the event host, journalist and broadcaster Andrew Neil.
The experts, comprising senior executives from The Money and Mental Health Policy Institute, Ofgem, Joseph Rowntree Foundation, the Money Advice Trust, the CSA and The University of Bristol were pressed on what progress they had made in addressing and overcoming the issue of managing the most vulnerable of customers in debt, including the very poor.
What became clear was that every one of the organisations represented had worked hard on the issue in isolation, but a clear lack of collaboration and co-ordination of those efforts was potentially hampering progress. Indeed, when pressed further on suggestions that any ‘real progress’ was being made at all, it took speakers from the floor to come to the experts’ rescue. They reported that recorded calls, call analyses, internal and external audits, and specialist teams were all contributing to identifying and supporting the most vulnerable customers, and delivering tangible, measurable results.
Stigma and reluctance to report
Everyone agreed that the stigma of debt, and the stigma of mental health, still needed to be addressed, and it needed to be recognised that some customers were refusing help, even when it was offered. One panellist argued that society still thinks that it’s good to make people feel bad about being in debt, but that the problem was not insurmountable. All agreed that much wider stakeholder engagement (ie with health professionals, debt collection agencies, debt advisors, local authorities, and policy makers) was urgently required if the desired step-change was to be achieved.
Lack of consistency
Part of the problem, and a theme that ran across this panel debate and an earlier one about ‘regulation based on the consumer’ (which I sat on), was the lack of agreed best-practice and regulation for all forms of debt collection. Whereas the CSA could rightfully point to its Code of Practice, and the Financial Conduct Authority (FCA) could highlight its authorisation for agencies collecting financial services debt (i.e. debt that stemmed from a consumer credit agreement and previously regulated by the OFT), certain parts of the ‘collections’ world were not subject to the same levels of scrutiny. This was especially true of local authorities and ‘government’ debt – i.e. monies owed to public sector organisations such as HMRC that appeared governed by different rules. In these cases, treatment of customers was, and still is, far from universal, and this was put to the earlier panel to solve the conundrum of whether a single regulator for debt collection was a viable option.
While the essential service regulators (Ofwat and Energy UK) insisted that they demanded the very highest standards from either in-house or external collectors, it was only towards the end of the debate, and when pressed hard by Andrew Neil and another pertinent question from the floor, that they agreed that a more consistent approach was not only required but should be accelerated.
The role of the UK Regulators Network (UKRN) was explored, Mr Neil pointing out – somewhat witheringly – that in the two years since the network was formed it had done little beyond issuing a leaflet which he said, no-one would have read. The panel agreed – perhaps for very different reasons – that the same principles and practices should apply to all debt and all consumers.
The hurdle, as I identified, was that it required a change in law, and I did not hold out much hope of a speedy resolution. The Government, it seems, has other priorities.