Posts Tagged ‘Consumer Protection Regulations 2008’

New Lending Code 4:mental health, third parties

November 11, 2009
175. Where it is appropriate and with a customer’s consent, subscribers should work with advice agencies and health and social care professionals in a joined-up way to exchange information and ensure an effective dialogue. [Reproduced with the kind permission of the British Banking Association -see link below]

Many creditors, and some debt collectors, may well prefer to work with representative agencies. Always much easier to work to a routine and have someone else work out the details, and do all the questioning and examining.

Especially if that intermediary, that third party, because of its own pressures, needs to pigeonhole and classify elements of the debtors finances and problems.

Often this is presented as a requirement. To my mind this is disgraceful, and a breach of the terms under the defunct Banking Code, the new Lending Code and under the Consumer Protection Regulations.

Of course this third party representation can work sometimes for the debtor. But many cases have unique elements that are quite difficult to satisfactorily understand, let alone resolve.

For that reason among many others, such as the individual’s rights in a democracy, it is important that the right to represent oneself is again emphasised.

By implication the institutions are told that they are dealing with an individual, and that individual will decide whether to use an intermediary or not.

Notice also the reference to a ‘joined up way’ and ‘effective dialogue’. One hopes this is more effective that Tony Blair’s joined up government. But putting that humour aside, it does mean that the obligation is on the creditor to ensure proper collection of information and making inclusive judgement after all the to and fro discussion.

Creditors are also, by implication, required to inform themselves on mental health issues. This is why a specialist department for the vulnerable cases is not just a good idea, but sound practice. The creation of such departments should be treated both as a matter of urgency, and enforced by the OFT.

Joseph Harris, Debt Control Man

Author: Control Your Debt Crisis on Your Own Terms

http://www.controlyourdebtcrisis.co.uk

The new Lending Code is here http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=1758

The MALG 2007 submission to the review of the code is here http://www.moneyadvicetrust.org/download.asp

And the Treasury Select committee view is here http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtreasy/274/27406.htm#a18

New Lending Code 3: mental health, responses

November 10, 2009
174. The appropriate response will differ in each case and could involve a range of approaches, including:
• working positively with an advice agency
• promptly carrying out agreed actions
• being flexible in responding to offers or schedules of repayment
• sensitively managing communications with the customer (for example preventing unnecessary and unwelcome mailings). [Reproduced with the kind permission of the British Banking Association -see link below]

 

Paragraph 174 has some useful pointers to the creditor on how to handle its dealings with vulnerable debtors.

These terms: ‘positively … promptly … flexible … sensitively’ give a clear indication of the manner in which companies should gear these particular contacts. This is in sharp contrast to the normally aggressive and harassing manner of most debt collection departments and debt collection agencies.

Sensitive in the context of this matter is defined as finely aware of the attitudes and feelings of others [The Penguin English Dictionary].

While I suggest the companies rethink their whole collection procedures in light of this advice, it will be a big advance if they do so at least for the vulnerable. Since the Consumer Protection Regulations already feature the idea of differences of approach to vulnerable consumers, there is now no excuse for creditors not making this policy for their internal procedures.

Those who prefer to handle their own affairs should note that the use of advice agencies remains an option, not a requirement. While the specialist charities do know their own fields, and offer more awareness, you should be careful about the awareness of any intermediary over your own situation.

Never allow yourself to be harassed over this by agents. Remember it is not your job to make the companies’ lives easier, but to get fair treatment – and to yourself behave fairly!

If companies fail to show this level of care in a case of mental health disorder they should be reported to the monitoring agency – The Lending Standards Board. If you feel the matter is serious I suggest you also report it to the Licences Section of the Office of Fair Trading.

Joseph Harris, Debt Control Man
Author: Control Your Debt Crisis on Your Own Terms
http://www.controlyourdebtcrisis.co.uk

The new Lending Code is here http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=1758

The MALG 2007 submission to the review of the code is here http://www.moneyadvicetrust.org/download.asp

And the Treasury Select committee view is here http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtreasy/274/27406.htm#a18

New Lending Code 2: mental health, systems

November 6, 2009

Debt and mental health
This section of guidance is relevant to both personal and micro-enterprise customers.
173. The impacts of financial difficulty can be especially acute for customers with mental health problems. Subscribers should consider their processes and systems to ensure that they can be responsive to a customer in financial difficulties, from the point at which they are made aware of a mental health problem. [Reproduced with the kind permission of the British Banking Association – here]

The Lending Code is now part of the formal equipment of the Office of Fair Trading, and sits more certainly side by side with holding of Credit Licences and with such fair dealings rules as the Consumer Protection Regulations.

Monitoring remains with the Lending Standards Board [that was the Banking Code Standards Board], but penalising becomes a matter for the OFT.

This is why this is such an important advance. It is now a requirement for creditors and debt collectors to take into account mental problems where there are financial difficulties. This is already covered in the CPRs, under the guise of vulnerable debtors. Vulnerable includes the elderly and those without funds.

While the Debt and Mental Health section is by no means as definite as I would like, it is such a big strengthening of the position of debtors with such health problem that the wording is to be praised as improving the experience of such debtors.

By featuring the good practice guidelines of the Money Advice Liaison Group, the other members of the vulnerable classification are effectively included. The more definite advice in the guidelines also becomes part of good practice.

It is also worth glancing at the 2005 comments of the Treasury Select Committee.

Joseph Harris, Debt Control Man
Author: Control Your Debt Crisis on Your Own Terms
http://www.controlyourdebtcrisis.co.uk

Card Firms Giveth, Card Firms Taketh Away

November 28, 2008
How is it, that when I saw Peter Mandelson was involved, I started looking for the catch?
Our Business Secretary with Gareth Thomas, Consumer Affairs Minister, held a meeting with credit card companies [not sure who came, but I’m looking!] to get more time for debtors to organise their affairs. The target was described as ‘breathing space’. http://uk.reuters.com/article/personalFinanceNews
Now I am not even sure how that fits with the information that the reason for the meeting was to express concerns to the representatives about the high level of interest rates charged on credit and store cards.

And a joint statement declares: ‘…the … industry would report back in two weeks’ time [sic – note superfluous “…’ time…”] on a set of fair principles to help card borrowers to manage their debts… [my italics and my disgust!].

I’m not asking you to share my despairing feelings about the poor grammar from senior members of the government, but I am asking you to note how debtors will be hurt, not helped, by all this.

Bear in mind the Consumer Credit Licence, the Consumer Protection Regulations 2008 and the Banking Code all give much better protection than a set time. Not to mention the directives of the European Union Commission – of which Lord Mandelson was, until recently, a Commissioner. Is he with the people or with business?

AND let us be quite clear, this is an attempt to steal the right to represent oneself. An attempt to breach ancient British law.

The new dictatorial requirement will be that ‘…customers in difficulty would now get 30 days grace … IF [my emphasis] a debt advice agency was [not “is”, note] helping … a repayment plan…’. Further in this from this arrogant group ‘… could be [my emphasis] extended for a further 30 days subject to demonstratable progress being made…’.

My own experience is that I have negotiated for myself with 11 companies, and none of these negotiations were completed inside the incredibly restrictive 60 days of this great gift from the keen brain of the Lord Mandelson. In fact I have four negotiations which are taking over 18 months.

Who is to judge, in the terms of this carve-up, what is demonstrable progress. In negotiation one is in a starting position of disagreement, and the idea that one side or the other may be an arbitrator is nonsensical and dictatorial.

And, by the way, what about the role of the Financial Ombudsman Service which this undercuts in the most destructive way – certainly from a debtors’ point of view.

And the industry has ‘…agreed to look at [my italics] its practice of risk-based re-pricing…’. Readers of this blog will know I wrote a series of articles many weeks back on the disgusting level of interest rates. That the government has only just paid attention to we ordinary people who are truly hurting shows how little regard it has for us.

A government spokesman is reported to have said the government is ‘unhappy’ about ‘increases of up to 10 per cent OR MORE [my emphasis]’.

Well, I don’t know about you, but I want a government that is raging angry about such profiteering and instead of inviting the sector to make the debtor’s position worse is prepared to actually make them obey the existing regulations.

That the negotiations appear to be set on limiting our options, and not improving them is worrying to say the least.

Are we truly in the middle of the new Feudalism, my fellow serfs?

Joseph Harris

Debt Control Man

debtcontrolman.wordpress.com

 

 

 

 

 

Interest Rate Action 1 of 3 – Complain

July 31, 2008

Creditor Complaints Procedures and FOS

We have got so used to being told what to do by big companies, and have placed so much trust in them that it comes as a shock when we find their feet are of clay. Similar to the day we realised our parents do not know all the answers to everything!
So realising that the credit offering companies are more concerned with their profits and bonuses than with our needs is a bit of a culture shift. Alright I exaggerate a bit – but not as much as you might at first think.
The question then is what to do about it.
We have more power than you might think in this. And that power is in complaint. Not at the pub across a pint of beer, or in bed at night to our partners.
To be effective complaint has to be focused and clearly thought through. So let us start with the companies’ own complaints procedures.
We start there because it may be that we can get a quick result, and save the further effort. But don’t count on it!
There is a second reason. Only after we have completed that procedure can we take the issue to the Financial Ombudsman Service (FOS); and this latter is worth doing.
If you are being charged an interest rate that is higher than 18% a year on a credit card [that is 1.5% a month] or than 9% for a term loan, or 18% on direct mail you do, in my opinion, have cause for complaint about that interest rate.
Even those cut off points are high rates to me, but we have to find points that are not themselves going to be cause of argument. Anything above these levels while Bank Rate is below 6% is usurious, and therefore immoral in the terms accepted by three major western religions for thousands of years.
Somewhere on your statement should be information about the complaints procedure of that company. It is a requirement for all members of the Banking Code and even non-members are expected to conform by the FOS.
The main points to get across about any sharp upward change in your rate at any time recently is that it is unfair and unreasonable. ‘Unfair’ is an important term in the Consumer Protection Regulations 2008 and the test of reasonableness is basic to British law.
You will need to make sure you put both the old and new interest rates in and point out that Bank Rate has not increased by even one percent in the period and therefore there is no case for this force majeure change to the rate charged to you. In part you should remember this letter will form part of what the FOS will work from so it needs clear information in it.
Send this letter off and wait for the answer. You should get an acknowledgment and usually about eight weeks later a final response.
If the final response does not reduce your rate to a sensible figure you send a formal complaint to the Financial Ombudsman Service. This will take a long time because the service is terribly overloaded already. But wait patiently and you should get a positive response. The FOS has the power to force the creditor to change the rate and/or make the company pay compensation.
Get the appropriate forms from the FOS website.
A lot of such complaints will encourage the FOS to raise the matter with the regulators.
See also the next two blogs I am preparing Interest Rate Action 2 of 3 – Complain which deals with contacting the Office of Fair Trading and Interest Rate Action 3 of 3 – Complain Which deals with the Financial Services Authority.

Joseph Harris
Debt Control Man