the momentum of the MP’s and Advice sector increasing and pushing for
serious changes to the Enforcement Industry with their idea that the FCA
is the best regulator for the Industry; my question is “how will we
bridge the considerable gap between the two as we are miles apart?”.
Whilst they are probably the best fit for dealing with complaints and governing the Industry; there are questions to be answered about how the self-employed Enforcement Agent will fit in to the model.
The problem we have, is that Governments have never been great at implementing complicated legislation and in fact, the Tribunals Courts & Enforcements Act 2007 Schedule 12 was a prime example of this, it took 7 years to implement and was full of so many blackholes and vague statements that it makes it impossible, at times, to ensure full compliance.
Whilst the Tribunals Courts and Enforcements Act was based on the National Standards, the biggest blackhole is the term “Vulnerable Person”; the Enforcement Agent has a duty to deal with “Vulnerable Persons” fairly and report to the Claimant/Client on how to deal with this. The problem is, the National Standards give an extensive list of persons who may be classified as vulnerable but if the Enforcement Agent attempts to gather evidence to support this or deal with debtors that have no evidence, they are classified by the Debt Advice Agencies as breaking the rules and aggressive in their manner. The Enforcement Agent has a duty to ensure that the evidence is provided and that where it is not present, they are to continue to enforce.
Many complaints are made about Enforcement Agents that the debtors contact them during the compliance period and ask for a payment plans which is rejected due to the low amount offered by the debtor which means a visit is required and an Enforcement fee applied.
Many of the issues the Enforcement Agents face is due to mis-information supplied by “so called” Internet advice sites giving in some cases, controversial advice like “it is ok to attack an Enforcement Agent whilst he is in your house because he is a trespasser”. We also find bad advice issued by the debt advice sector such as, “do not deal with the debt, ignore it; the Enforcement Agent will send it back or they cannot do anything because what you own will not cover the debt”.
In my years in the Industry, one Debt Agency will advise the debtor not to go in to a Controlled Goods Agreement despite nominal payments being part of the agreement because they felt that the debtor should not do this.
All these examples generate complaints even though the Enforcement Agent is doing their job; something that will not change whether the Enforcement Agent is regulated or continues under the current system.
If the MPs and the Debt Advice Sector get what they want, how will that affect the Enforcement Agent, since there is no money to fund this change by the Ministry of Justice? I would not be surprised if they just try a “lift and shift” policy.
The effect on companies will be that they will need to be a “fit and proper” company under the FCA framework and have passed the means test.
The FCA base membership on how complex your business is, these fees are based on a sliding scale.
These are 3 of the main application fees:
• £1,500 – straightforward application
• £5,000 – moderately complex application
• £25,000 – complex application
There is a minimum yearly fee of £563.00 increasing with the turnover of the member.
For many companies this will not be an issue as they will already be members of the FCA and bound by their policies for debt collection and vehicle repossession activities.
The company will cover the activities of their employees and self-employed agents who work for them solely.
They will deal with all the complaints from within the company following the FCA guidelines.
If a self-employed Agent works for two or more companies, he/she must register their self in their own right with the FCA and set up a complaints handling process to deal with complaints within the FCA complaints procedure.
This is an added cost to the agent and, to be honest, out of the reach of many agents due to cost and infrastructure.
The FCA runs a “fit & proper” regime and the applicant must meet these; for example, having the appropriate qualification and can prove a level of competence, they must also demonstrate:
• integrity and reputation
• competence and capability
• financial soundness
They must also be able to show an ongoing capability and that could mean a retest periodically throughout your term.
Part of the FCA process is the complaints process which is a very strict policy that all notices of Dissatisfaction (Complaint) are reported to the FCA and that all complaints have a root cause analysis completed on each one to show where the error lies within the process.
Issues the Agents will have with the policy is if a complaint is made to the Ombudsman there is a charge for the handling of the complaint (win or lose). This process encourages early settlement of complaints within the process as the fee for the Ombudsman to deal with the complaint may out-weigh the fees applied to the case.
Within the Financial Industry it is common practice to offer refunds or ex-gratia payments to the complainant as they are aware the Ombudsman will make their charge of approx. £500 per case and if any failings are found they give compensation of £25 per failing on average. This policy would encourage companies to return fees to settle the complaint.
The FCA also analyses complaints and any person who has a large amount of complaints may have issues on renewals.
Whilst a regulator is probably the best option for the Industry, they have to ensure unlike the Tribunal Courts & Enforcements Act 2007 that it is fit for purpose and it addresses the following:
• The Enforcement Agent is paid on a pro-rata on all payments collected
• The process is equally balanced between Agent & Agency
• That a Vulnerable Person Test is introduced to stop abuse from all parties
• That Clients pay the Enforcement Agent for the work done if they withdraw the case as per the National Standards
• Agencies are held accountable for their actions instead of all the onus being put upon the Enforcement Agent
• A fairer complaints procedure allowing the Enforcement Agent recourse for vexatious complaint
• That advice to the Sector is regulated; stopping internet advice sites from misadvising debtors and incurring them further costs
• Proper training programmes for the Debt Advice Sector and guidelines on the advice they give
• More balance recourse for debtors that assault Enforcement Agents and interfere with Controlled Goods
• The National Standards are made legislation for increased transparency