At the beginning of 2021, UK inflation was under 1% but by the end of the year it was about 5%. In May 2022, it was up to nearly 9%. More than 20 million household say their energy bills go up by over 50% in April. Petrol price increases are hard for anyone commuting to work by car or living in a rural area. And of course rising food prices are affecting everyone. When it raised UK interest … [Read more...]
Articles for debt advisers
Robo advice – can it deliver good quality debt advice?
"Robo advice" is being used increasingly to provide investment advice to people who can't afford individual advice from an IFA. Can a similar approach deliver good quality debt advice through an automated online process? Face-to-face advice is sometimes seen as both expensive and a process that not all clients may want or need. In this article I examine what robo debt advice can do well, the … [Read more...]
Why the FSCS doesn’t cover payday and other lenders
In 2018, when Wonga went into administration, people started asking isn't there some kind of guarantee system that would step in if Wonga fails? Won't the FSCS help? This has become more important every year since then, with most of the major payday lenders failing, including the Money Shop, QuickQuid, Sunny and Myjar. From 2020, other sorts of high cost lenders have also being failing, … [Read more...]
2021 – the Debt Camel review of the year
This is my review of the major events of 2021 in the debt sector. It doesn't go into detail about what happened, it mainly looks at how well the year went in practice and why bits of it didn't go better... Inevitably it concentrates on the areas that most interested me! And my ratings are just a bit of fun. I'll divide them into groups: FCA-related; Insolvency Service-related; external … [Read more...]
IVA mis-selling must stop – regulators start to take action
Many people have been mis-sold IVAs when they had a better (cheaper, quicker, less risky) debt option available. These other options were ignored or not properly described by some firms that should have given proper debt advice. IVAs are the only debt solution in England, Wales and Northern Ireland that generates large fees for the firms setting them up. These fees can distort debt advice given … [Read more...]
Section 13A – a little-known way to get Council Tax written off
Councils in England and Wales can reduce or write off your council tax under Section 13A (1)(c) of the Local Government Finance Act 1992. This has been called "the best-kept secret in council tax law". These Section 13A write-offs can be used if your house is uninhabitable because of flooding or fire. But you can also get a write-off if you have no money to pay your council tax after paying for … [Read more...]
The 2021 IVA protocol – what has changed & will it stop mis-selling?
The IVA Protocol 2021 was published in April 2021. This replaces the old 2016 Protocol which should not be used for new IVAs after 1 August 2021. The terms of IVAs already in progress are not affected by the new version. The new Protocol aims to be easier to understand for people in debt - for example "debtor" has been replaced by "consumer" and it has been put into the typical "gov.uk … [Read more...]
Good news – higher DRO limits from end June 2021!
UPDATE 10 May 2021 The Insolvency Service has announced the new limits that will be introduced for Debt Relief Orders (DROs) from 29 June 2021. These are: the total debt allowable in a DRO goes up from £20,000 to £30,000. the level of "surplus income" after paying your bills and everyday expenses has been increased from £50 to £75 per month. an increase in the general assets you … [Read more...]
StepChange redundancies & the funding of debt advice
On 22 April 2021, StepChange announced that it was proposing to cut its staff by 10%. It has started the process of consultations about 140-17o redundancies. To many people this will sound bizarre. In October 2020, the Financial Conduct Authority (FCA) found that 20 million people have seen their financial situation worsen because of Covid-19 and 7.7million people saw it worsen a lot. The FCA … [Read more...]
Kerrigan v Elevate Credit – an “unfair relationship”
The judgment in the Kerrigan & others v Elevate Credit International Ltd was published on 5 August 2020. Elevate Credit International was a large UK payday lender, trading as Sunny. Kerrigan and the other eleven claimants were Sunny customers who had made affordability complaints to Sunny through a claims company. The claims company brought the case and selected six claimants; Sunny … [Read more...]