The Financial Wellness Group is calling for the public Individual Insolvency Register, and the publishing of personal details in the Gazette, to be abolished and be replaced with a private register, accessible only to those with a legitimate need to access it.

The aim is to try and reduce the shame and stigma that many people with problem debt say that they feel. According to the FCA’s Financial Lives survey, shame and embarrassment are major factors that hold people back from seeking debt advice earlier. Being ashamed just adds to the mental health impacts that problem debt brings and the public register only serves to heighten that shame and delays engagement with debt advice.

Sebrina McCullough, Head of External Relations at Financial Wellness Group said “Since 2019, just over 2,000 of the customers we’ve advised to take an insolvency solution have told us they didn’t want to proceed, as they didn’t want to appear on the public register. That’s around 1 in 6 of all the customers we advised to take an insolvency solution.:

“Multiply these figures across other advice providers, and there could be tens of thousands of people every year who are discouraged from taking their most suitable route out of debt – all because of an outdated and stigmatising practice.”

The Group says making the insolvency register private will help to break down the taboo of debt and encourage people to feel comfortable and able to open up about their finances. Consumers should have confidence that any solution they take, will remain confidential. There is no good reason for their friends and neighbours to be able to find out.

Inclusion on the public register puts some people at increased risk, for example of violence or abuse from an ex-partner. In these cases, the debt solution provider has to apply to the court to exclude the individual’s address from the public register. This creates unnecessary work both for the advice provider and the court service.

Being on the public insolvency register also brings unsolicited marketing approaches at a potentially vulnerable time and places those on it at increased risk of identity theft, and is in direct contradiction to the advice on the Action Fraud website.

There are many organisations that have a legitimate need to access details of personal insolvencies, including lenders and creditors, credit reference agencies, traders, employers and membership bodies. Financial Wellness Group is proposing that they would continue to be able to do so via a private register.

McCullough added “The Criminal Records register makes an interesting comparison. Criminal Records are private, but various firms and agencies can apply to access the register for legitimate reasons. It is not clear why criminals deserve more privacy than people in an insolvency solution.”

“We’ve already had strong engagement and support for the #NoShameInDebt campaign from across the sector, including other advice providers and creditors. In particular we’ve had useful feedback on how a private register could be structured to work better than the existing public register for those that need to use the data.”

“We believe the public insolvency register is anachronistic. A private register could easily ensure that the information remains available to those that need it, without exposing individuals’ personal details. Replacing the public register would be another step in trying to ensure that there’s no shame In debt.”