Credit, Collections & Insolvency News
Bailiffs are still not being held to account and will continue to inflict stress, anxiety and further financial hardship until the Ministry of Justice (MOJ) introduces independent regulation according to research by debt charities.
The 11 debt and mental health organisations that make up the ‘Taking Control’ campaign on bailiff reform are calling on the government to establish independent regulation to clean up the industry and protect people from the harm poor debt collection practices cause.
The new figures published by the charities that show regulation has significant public support. National polling, commissioned by Citizens Advice and StepChange Debt Charity, reveals:
The figures have been published in Taking Control’s joint submission to the Ministry of Justice’s call for evidence into bailiff reform.
The group says government reforms in 2014 have not improved the sector. A survey of advisers from the Taking Control organisations found they didn’t think bailiffs’ behaviour in terms of ‘adhering to rights of entry’ has improved since the 2014 reforms. Concerningly, more advisers think that it has got worse (37%) now, than they did (16%) in 2015.
Having debts collected by bailiffs is a common experience. In 2016/17, local authorities in England and Wales used bailiffs to collect debts 2.3 million times, according to research by the Money Advice Trust.
Of particular concern is how bad practice by bailiffs disproportionately affects those in vulnerable situations. Of the people Citizens Advice helped with bailiffs last year, 40% had a disability or long-term health condition.
In one example, the charity helped a partially deaf man who had been contacted by a bailiff in relation to council tax arrears. When the bailiff visited they said that on their next visit they would force entry to his property despite not having a controlled goods agreement.
A further 83% of National Debtline callers surveyed who had experienced bailiff action reported a negative impact on their wellbeing.
Citizens Advice alone has reported a 24% rise in bailiff problems since 2014, and it remains one of the most common debt issues it helps people with. More than 1 in 3 (39%) people contacted by bailiffs in the past two years witnessed a bailiff breaking the rules and it is a widespread problem. Bailiffs break the rules because it’s too difficult to complain and hold them to account
Since the 2014 government reforms, there have been just 56 complaints to court about bailiffs. It is unclear, of these, how many resulted in the bailiff’s certificate being revoked.
The campaign’s evidence shows that people find it difficult to report an issue and lack faith in a process where they are encouraged to complain first to the firm representing the individual bailiff.
They also say there are no effective sanctions or penalties for firms whose bailiffs break the rules. But as its evidence shows, people lack the confidence to lay a complaint:
Recent polling in England and Wales found 3 in 4 people (74%) who experienced bailiffs breaking the rules didn’t complain.
A StepChange client survey found that, of those who felt they had been unfairly treated by bailiffs, only 15% made a complaint.
Another StepChange survey of clients showed 29% had tried to set up an affordable payment plan over the phone. However, the bailiff insisted on visiting their home, incurring larger fees.
The bailiff sector does not have the independent oversight and effective consumer protection that have been commonplace in other sectors for many years. This call for evidence is the opportunity to introduce the independent regulation the industry needs to protect vulnerable people from bad practice.
Gillian Guy, Chief Executive of Citizens Advice, said “Almost five years on from the 2014 reforms, and with mounting evidence that bailiffs continue to flout the rules, government action is long overdue.”
“The Ministry of Justice must move to establish independent bailiff regulation to stop harm being inflicted on people, especially those in vulnerable situations due to their debt or ill health. We’re concerned that without a regulator, any attempts to improve practice in the sector will fail to protect people.”
“They also need to create an independent complaints process, like in financial services, so complaints about bailiffs are dealt with impartially.”
Phil Andrew, Chief Executive of StepChange Debt Charity, said “Only formal regulation can solve the problems in the bailiff sector. Complaints provide a case in point, where the complaints mechanism involves the bailiff industry’s own trade body acting as adjudicator.”
“Just 15% of StepChange clients who felt they had been unfairly treated by bailiffs have complained. That’s shocking but unsurprising, as the industry’s complaints mechanism is fragmented, opaque and can’t be trusted.”
“Bailiff firms uphold only around 1 in 10 of the complaints put directly to them. By comparison, financial services firms uphold about half. Industry protectionism and self-interest are causing detriment and harm to some people who have legitimate cause for complaint about bailiffs.”
Joanna Elson, Chief Executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said “Bailiff reform is now urgent. It is clear that previous changes have not been successful in cleaning up this industry, and poor practice amongst bailiffs and bailiff firms continues to be widely reported.”
“When bailiffs are used, it is crucial they act within the rules and that people in debt are protected. Only independent regulation and a clear complaints mechanism can bring this about.”
“As well as regulating the bailiff industry, the government needs to take action to make sure that far fewer debts are passed to bailiffs in the first place. Local authorities, in particular, referred 2.3 million debts to bailiffs in 2016/17 in England and Wales. Councils need to do much more to help people who fall behind at a much earlier stage – and should only ever use bailiffs as a last resort.”
Responding to the debt charities figures Russell Hamblin-Boone, Chief Executive of the Civil Enforcement Association, said “This is a very narrow campaign that attempts to place the problem of unmanageable household debt at the door of the enforcement industry. While it makes for some appealing headlines, anyone who understands our judicial process will appreciate that this is a gross simplification. A visit by an enforcement agent is always the council’s last resort.”
“There are prescriptive regulations that set out in detail the powers and procedures for collecting money owed to local authorities. Local authorities issue court orders and warrants instructing enforcement agents to collect unpaid debts to pay for social care, police, child support services, refuse collection. But Citizens Advice has offered no suggestions on how these local authorities would be supervised under a new regulator.”
“Citizens Advice researchers are a law unto themselves when it comes to research. They continue to use poor research, self-selecting surveys and anecdotes in a futile attempt to deflect from a lack of genuine evidence. Even a parliamentary committee has been unable to get a detailed explanation of where the figures come from. Do we really believe that 6 times more people have an opinion on bailiff regulation than watch X Factor?”
“The reality is that enforcement firms have excellent relations with the majority of their local Citizens Advice bureaux and work collaboratively to help people with problem debt. Like the adviser that had a client who had been visited by an enforcement agent for a magistrate court fine. The person was identified as being financially vulnerable, and his wife was being treated for cancer. Working together the agent and adviser arranged for the debt to be referred back to the court as unenforceable. The adviser reported that the agent was really helpful in helping to identify other fines and their courts of origin.”
“Enforcing public debt is a complex judicial process and agents act within the law. So we cannot base decisions about new regulations on the views of a handful of debt advisers who consistently demonstrate a worrying lack of knowledge of the existing regulations.”
“The Ministry of Justice is gathering robust evidence to identify any systemic problems in the enforcement process. Debt advice groups could make better use of their time by supporting the work of the industry to make sure that local services continue to get the funds they desperately need.“
