This time of year can be bleak. With turkey and twinkling lights a distant memory, it’s back to reality. Many people will also be facing debt, exacerbated by the cost of Christmas, higher heating bills, and other expenses that peak in winter.

In 2018, Citizens Advice said people are struggling more with bills such as council tax and energy than with debt relating to financial services. This household debt sits outside the FCA’s remit – and ours as the ombudsman. But the two are linked, because in some cases they’re one of the reasons people take out loans, credit cards and other regulated debts. And these are things we can help with.

So what are we seeing, and how can we help? We’ve highlighted in this ombudsman news how businesses’ lack of empathy or flexibility can create additional problems for people who are struggling, and potentially in vulnerable circumstances. We’ll use our powers to ensure this doesn’t continue – and in some cases, tell businesses to pay compensation for the upset they’ve caused. The case tudies we’ve chosen are aimed at helping businesses do things better. But we’re also reassured by good practice we see. These positive signs are backed up in our own recent research: in complaints we reviewed indepth, we saw a majority of debt collectors following codes of conduct, limiting the impact of unavoidably stressful situations.

The consequences of debt can escalate quickly – and where debt collection’s concerned, things may be a long way down the line before we’re asked to step in. So we’ll need to effectively prioritise cases where people urgently need our help. We’ll also need to quickly identify what’s beyond our remit, and make sure we’re signposting to other organisations who can provide support. This will often be free advice agencies or debt charities, which play a central role in helping people resolve their money worries once and for all.

While the prospect of tackling your debt may be overwhelming, constructive conversations – followed up by effective action – are key to turning things round.

Caroline Wayman, Chief Executive, Financial Ombudsman Service

Source: Ombudsman news

 

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