Reform of government debt collection needed ‘now more than ever’

The Money Advice Trust, the charity that runs National Debtline and Business Debtline, has welcomed a new Cabinet Office call for evidence on fairness in government debt collection, calling the move an opportunity to bring about ‘real and lasting improvements’ to protect people in financial difficulty.

The call for evidence comes at a time when momentum is growing for change in the way that central government and local authorities collect debt. Earlier this month 55 cross-party MPs and peers called on the Chancellor to introduce a Debt Management Bill to embed a fairer approach to debt collection across all of government.

The call for change from Parliamentarians follows evidence from debt advice charities, including the Money Advice Trust, on the need for reform and a recent Centre for Social Justice report outlining how central and local government lag behind the private sector in their approach to debt collection.

Last week, debt charities called for urgent reform to council tax collection to be implemented before bailiff home visits – which the Government legislated to ban during Covid-19 restrictions – resume on 24th August. The end of the ban has led to fears of a flood of bailiff visits as councils in England and Wales rush to collect outstanding debts, adding financial and emotional pressure onto households already struggling with the financial impact of Covid-19.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “The Cabinet Office’s new call for evidence is a welcome opportunity to bring about real and lasting improvements in the way government collects debt.

“The finances of millions of households have been hit hard by the Covid-19 outbreak – and a fairer approach from central and local government is needed now more than ever. We need a Government Debt Management Bill that enshrines in law a fairer approach, independent bailiff regulation and – in the much shorter term – urgent reforms to council tax collection in the wake of the outbreak.

“We look forward to responding to the call for evidence and continuing to make the case for reform to protect people in financial difficulty.”

Insolvency and restructuring profession welcomes completion of Corporate Insolvency and Governance Act’s legislative journey

A number of key organisations from across the insolvency and restructuring framework have welcomed the passing of the Corporate Insolvency and Governance Act into law, following its Royal Assent on June 25.

Insolvency and restructuring trade body R3, the Institute of Chartered Accountants in England and Wales (ICAEW), the Insolvency Practitioners’ Association (IPA), ICAS, and Chartered Accountants Ireland have all welcomed the passage of the Act on to the statute book.

The Act introduces the biggest reforms to the UK’s corporate insolvency framework for almost twenty years and makes a series of temporary changes to the corporate governance requirements for companies and other entities.

In particular, the new business rescue moratorium and new restructuring plan are designed to give companies the breathing space and tools required to maximise their chance of survival – and are measures the profession has been campaigning in favour of for a number of years.

Colin Haig, President of insolvency and restructuring trade body R3, said: “Our members already play a key role in assisting struggling firms through financial difficulty, and the Act gives them additional tools with which to support this important work at a critical time for the economy. These tools now need to be tested in practice, but we are hopeful that they will prove to be successful.”

Bob Pinder, Director at the ICAEW, said: “This Act contains both short-term measures and long-term reforms, and our licensed insolvency practitioners will have a key role to play as the changes take effect.

“Our licensed insolvency practitioners are responsible professionals who are committed to helping companies restructure and survive where possible, and they will take every step necessary to ensure the legislation works in the best possible interests of all stakeholders.

“This legislation has been designed to save businesses and jobs, and we hope it’s a success.”

Michelle Thorp, CEO at the IPA, said: “With Covid-19 restrictions having presented a significant challenge in many quarters of life, we welcome the Bill and its objective to support businesses. We will monitor the Bill in practice, offering input where required to help ensure that the measures serve all stakeholders in insolvency processes correctly.”

David Menzies, Director of Practice at ICAS, said: “The new corporate restructuring tools and temporary suspension of parts of insolvency law are welcomed by ICAS members and will benefit many of their clients during what is likely to be a period of significant and sustained economic turmoil.

“It is hoped the measures will fulfil government expectations and give companies the breathing space and protection required to maximise their chances of survival.”

Qualco UK expands team as it onboards new clients

Qualco UK has appointed five staff members, growing its team, following a succession of significant client wins.

The company provides panel and asset management software and analytics to optimise collections on behalf of clients in the financial services, utilities, telcos and home shopping sectors. The onboarding of new clients, including the UK Government, presents Qualco with a varied portfolio of accounts including commercial, tenancy arrears, housing benefit overpayments, sundries, adult social care, council tax arrears and probate.

Viplavi Erkan joins the team as Project Manager, Client Services, initially to focus on new client on-boarding, and will go on to develop the client services team to deliver a seamless experience across Qualco’s client portfolio.

Viplavi is a familiar face to the Qualco team, having held the role of Head of Strategy at partner The Sigma Financial Group from 2011 until 2015. Her most recent role was Head of Strategy & Design for BT.

Data Analysts Anantharajan Muruga Narayanan and Andrei Sava joined Qualco’s analysis team, delivering analysis and reporting to clients and panel members.

David Smith has been appointed as a Developer to drive the advancement of ExtraCollect v2, David has moved from South Africa and brings a wealth of experience in software development and analytics. Lorena Martinez also joins the development team as Junior Developer, following a move from Spain to the UK to embark on a new career path.

The recent recruitment follows the launch of Qualco’s queries team, set up as an outsourced function that handles DCA queries on behalf of one of its energy clients.

Meanwhile, the company is seeking a Compliance Manager to work alongside the Head of Risk and Compliance, James Goddard. Interested applicants should contact: hr@qualco.co.uk.

Christian Jacob, Managing Director of Qualco, said: “We are delighted to welcome new faces to the team! Strengthening our client services operation and expanding our development team is a crucial step in scaling the business to support our growing client base. We look forward to making them feel part of the team!”

 

Just balances the books with Validis

Just Digital Marketplace has entered into an exclusive agreement with FinTech Validis to leverage the power of Open Accounting.

In another first for the enforcement sector, Just is using Validis technology to retrieve data from accounting platforms when enforcing against businesses.

Validis allows small and medium enterprises (SMEs) to share their full financial data history in a standardised format. The software securely retrieves data directly from popular accounting software packages and layers analytics to categorise and distil data.

The service is typically used by lenders and factors to help speed up decision processes but is being used by Just to help gain an accurate picture of the financial health of SMEs.

Just will be able access invoice data and balance sheet data, including fixed assets and debt ledgers. This will enable them to assess the best way to work with the SME in order to be able to trade their way out of debt, where possible.

“We’re using cutting edge technology to help gain better insight into defendant ability to pay. With the impact of COVID-19, it will become increasingly difficult to separate the ‘can’t pays’ and ‘won’t pays”, says Nick Georgiades, MD of Just. “The partnership with Validis helps us solve that challenge for our clients and achieve appropriate repayment arrangements in all cases; extending time to pay when necessary and pressing for quicker resolutions where the defendant has the means to pay”.

Jake Niarchos, Chief Revenue Officer of Validis commented, “We’re delighted to be working in partnership with Just. This is a really innovative use of our service and it’s great to see that Just understand the value of accessing real-time financials to better understand the financial health of SMEs. We’re confident Just will derive real value from the data Validis can surface”.

HCEOA welcomes Government confirmation of date for re-start of residential enforcement post-lockdown

The High Court Enforcement Officers Association (HCEOA) has welcomed the Government announcement that visits to residential properties to enforce debts owed to UK companies can restart from 24 August.

High court enforcement agents will be re-starting visits at this time to residential properties in order to take control of goods.

The restrictions on visits have been for residential addresses, following the laying of the amendment in the Taking Control of Goods and Certification of Enforcement Agents (Amendment) (No.2) (Coronavirus) Regulations 2020, which has been laid before parliament and came into force yesterday (24 June).

Andrew Wilson, Chairman of the HCEOA, said: “We welcome this announcement as our members now have a date on which we can all work towards, which is good news. This is important for the UK economy as our members collect over £100 million every year of unpaid debts on behalf of UK companies, and this is money these companies need to continue trading.”

He added: “We have a best practice post-lockdown plan which has been unanimously approved by our members and will ensure that we take a flexible and sympathetic approach to enforcement, whilst maintaining the safety of the public and enforcement agents.”

Government has stated that enforcement visits should be contactless where possible and adhere to the social distancing guidelines in force at the time. Agents should not enter residential property, unless there are exceptional circumstances and it is deemed safe for the agent and members of the public.”

The HCEOA has already agreed a post-lockdown plan, entitled “A Flexible and Sympathetic Approach to Enforcement”, which sets out the principles, working practices and behaviours that all High Court Enforcement Officers (HCEO’s) and representatives will follow from 24 August.

In line with the latest Government guidance, the plan details:

  • Additional training requirements for all enforcement agents prior to any home visits
  • The need to follow appropriate social distancing guidance where possible
  • The provision of protective equipment and hygiene supplies to ensure the visiting member of staff protect themselves, debtors and members of the public whilst at work
  • The plan will be under continued review in case of a change to government guidelines on the emergency period (e.g. a second spike, increased R rating, new lockdown).

Andrew added: “We remind our members and clients that the ban on the vast majority of residential enforcement is still in place until 24 August. Once lifted, the post-lockdown plan aims to consider the case-by-case circumstances of judgment debtors and ensure they are treated fairly whilst allowing creditors to recover the money they are owed.”

The HCEOA’s post lockdown plan is based on current conditions, and the Association will update it in line with changes to UK Government and Public Health England and Wales guidelines.

UK businesses owed £133b since lockdown, urgent need for funding to plug cash flow gap

UK businesses are returning to work this month with some trepidation, finds1 fintech business lender MarketFinance. Nine in ten businesses are waiting to be paid an average of £148,917 for work done pre-lockdown, half of those that applied for CBILS loans have been declined and cash flow will be strained as invoices take longer to be settled. It’s little wonder that 85% of business owners have felt a sense of loss of control over the past 3 months.

Finances

With £148,917 still owed to them since March 2020, the vast majority of businesses (81%) are also expecting to wait longer to be paid for the goods they provide and work they do from now on. Half anticipate waiting anywhere between 14-30 days beyond normal terms (45 days). Whilst 15% reported they could be waiting anywhere between 3-6 months longer to be paid for work.

Only 43% of businesses that applied for a CBILS loan were successful in securing it. The typical loan taken by these businesses was £211,667, though they applied for almost double this amount.

Anil Stocker, CEO at MarketFinance, commented: “The reopening of the UK’s high streets marked the first buoyant moment for UK businesses in months but it might well be the calm before the storm.

“Businesses are facing a three-pronged assault on their finances. First up, its alarming that only half of their CBILS loans are being granted, then we learn that they have close to £150k in outstanding payments since the lockdown began and now, it’s likely that they will have to wait twice as long to get paid for new work they do whilst demand and economic activity normalises. This coupled with a very moderate outlook for trading conditions, ‘rent quarter day’ this week and uncertainty about their workforce, no doubt this will put further pressure on businesses.”

Anil Stocker added: “Given the continuing uncertainty around how the country returns to ‘business as usual’, I would urge business owners to look beyond their banks and seek advice as soon as from other lenders, business advisors and mentors. The earlier they do this, the wider the range of potential solutions they’ll have open to them.”

Trading environment

As the lockdown has eased and shoppers return to the high streets, almost half (45%) of businesses are optimistic that there is pent up demand for their products and services which they are eager to serve.

This said, most businesses only expect a conservative 10% increase in sales over the next 3-4 months. While opinion is polarised on prospects; a fifth (19%) anticipate a 25-50% increase in sales whilst one in six (15%) expect a decrease in sales of more than 75%.

Longer term, business owners have revised down their expectations of when they anticipate things to return to normal. In March, the majority (56%) felt business would normalise by September 2020. However, now the majority (57%) feel it could take as long as 1-2 years and are planning for this.

Employment

Most businesses (45%) anticipate only returning up to half of their furloughed staff to work in July and a quarter are likely to be kept on furlough as part of the extended scheme as the economic picture and business climate plays out. The future remains less certain for the remaining quarter of furloughed staff, who could well be made redundant.

Office space

Of those businesses that have a physical location (office, warehouse), over two thirds (68%) are negotiating rent / lease reductions with landlords whilst a third have decided to leave their premises entirely because working from home has proven successful.

Feeling in control

Having faced a number of external shocks as a result of the pandemic, 85% of business owners have felt out of control in their business over the past 3 months. Given the impact of COVID-19, the lockdown, recession fears and a no-deal Brexit 60% of business owners feel exposed to conditions beyond their control.

Noble Conversations Analytics Insight Helps Contact Centres Manage Quality and Improve the Customer Experience

Noble Systems, a global leader in omnichannel contact center technology solutions, announces the newest addition to its business intelligence toolset with Noble Conversations Analytics Insight 2.0. Speech Analytics helps companies improve service and performance to result in more targeted customer experience.

Noble’s powerful analytics tools mine data from customer interactions to see trends, identify best practices, manage compliance, and gain deeper insight into contact centre, customer, and agent activities. Noble Conversations Analytics Insight provides even deeper vision into customer contacts. The new “Comparative Cloud” uses Noble’s intelligent speech analytics framework and world-class text transcription engine to compare how less-successful agents are communicating in comparison to the most-successful agents.

Searching for phrases, rather than individual words, helps further improve accuracy and refine next-step strategies. For many companies, speech analytics is becoming a vital component of the customer experience management operations, allowing them to analyse large amounts of information and screen agent conversations, giving them visibility into performance. This can be integral to managing the quality of service and making sure agents have the information they need to handle changing customer inquiries, especially in today’s more widespread environments where agents may not be sitting in the centre.

“Our speech analytics tools offer deep business intelligence on trends and patterns in customer behaviour”, said Chris Hodges, SVP sales and marketing. “The ability to monitor conversations, both in real-time and post-call, is becoming increasingly important, particularly as more agents are working remotely. Providing proactive feedback and coaching can help keep agents connected and engaged, whilst maintaining the quality of customer service. The Comparative Cloud functionality in Noble Conversations Analytics Insight makes it easier than ever to find the right phrases to use on customer interactions to get the best possible outcome – as well as those that should be avoided”.

StepChange comments on the reimposition of bailiff visits

The Government has quietly introduced amending legislation to allow bailiffs to recommence visits to people’s homes and to take control of goods from 23 August, having previously suspended them during the coronavirus emergency. StepChange Debt Charity believes this is unsafe, and deeply troubling when compared with the more careful approaches being taken in other sectors where regulators are closely overseeing the practices of firms.

StepChange says it is too soon to be enforcing against debts owed to the government, especially given the fact that the Financial Conduct Authority has extended protection to the end of October for debts such as mortgages and consumer credit. Far too many households will still be vulnerable at this point, and a more considered plan to help them recover their finances without rushing to premature enforcement is needed.

Under the Taking Control of Goods and Certification of Enforcement Agents (Amendment) (No. 2) (Coronavirus) Regulations 2020, published last Friday and coming into force this Wednesday, 23 August is confirmed as the date from which bailiffs can recommence visits to people’s homes. With 820,000 people behind on council tax (where debt collection is often enforced through the use of bailiffs), there is a large group of people who are potentially at risk of harm from aggressive and unrealistic demands.

The 23 August date coincides with the previously-announced end date for the protection for tenants from eviction for rent arrears during the coronavirus crisis. With 590,000 people behind on rent, tenants are another group at serious risk if eviction without consideration of ability to pay is allowed to happen.

The lack of protection over bailiff enforcement – where firms still remain unregulated and continue to operate under an inadequate self-regulatory code – contrasts starkly with the approach being taken to FCA-regulated mortgages and consumer credit, and to the recently announced expectations in the energy sector where Ofgem has said “We expect suppliers (and any third parties contracted by them) to ensure that any debt management processes are fair and give careful consideration to the customer’s circumstances and ability to pay – we will not tolerate sharp practice or aggressive debt collection and suppliers could face enforcement action where this is the case.”

Peter Tutton, StepChange Head of Policy, says: “We already know that households have built up over £6 billion of debt as a result of the coronavirus crisis, and that exiting this situation is going to require care and careful planning if we are to avoid serious financial hardship for millions of people. By the end of August, many households will still be facing great financial uncertainty.

“It’s shocking that the government prioritised reintroducing bailiff enforcement for debts like council tax over helping households reeling from the financial shock of lockdown. Government should be showing the way on enlightened debt practices but instead has fallen further behind the harm prevention approaches required of private sector lenders. We are still waiting for the improvements in council tax collection and bailiff regulation promised last year. What people in hardship need is help, not draconian enforcement.

“The suspension on rent evictions is due to end at the same time. a potential double jeopardy for people also struggling to pay rent. While the Government and FCA recently announced a welcome extension mortgage payment holidays and protection from repossession until the end of October, this does not seem to be being matched by joined-up thinking on the approach to tenants and to debts such as council tax.”

Sigma accelerates growth and jobs plans

One of the outsourcing industry’s leading specialists has announced plans to double in size over the next five years following a record period of growth in the UK and abroad.

The Sigma Financial Group, which offers white label customer contact centre services across the utilities, retail, financial services and telecommunications sectors, plans to double its 1,500 workforce by 2025 after cementing its position as a major provider to the utilities and energy industries – with the energy sector remaining a key focus for Sigma as it expands its expertise.

The business is forecasting a gradual increase in new jobs over the next five years at its West Midlands offices, and also in Cape Town where Sigma opened its third and fourth call centres two years ago. It is also closely studying acquisition opportunities in mainland Europe, eastern Europe, the United States and Australia.

The news comes as Sigma reported earnings of £4 million in the past year – a record 12 months for the firm which was acquired by the South African-based Digicall Group in 2016.

Chief executive of the Sigma Financial Group, Gary Gilburd said: “We have gone through massive change over the past five years – going from 200 employees to 1,500 and building our reputation as a trusted and versatile provider to a host of sectors.

“We are excited about our growth plans and our aspiration to double in size. It will always be challenging in such a competitive market but we have been backed every step of the way by our parent company.

“Planning to double our profits and workforce, both in the West Midlands and in South Africa, is an important step for us. It shows that despite the huge impact Covid-19 has had on many people and businesses, we have found ways to continue to deliver and have managed to keep growing but in a sustainable and responsible way.

“This includes our important markets such as the energy, water and financial services. Our growth in those sectors have been real cornerstones but it isn’t just about getting bigger, it is also about protecting our reputation as a call centre and credit management provider which our client partners can trust over the long-term.

“Overall, adding to our workforce both in Birmingham and Redditch is great news and an opportunity for what is a struggling local jobs market. We are also delighted to be expanding in South Africa and, as another important step, are seriously looking at potential acquisitions in mainland Europe, Eastern Europe, the United States and Australia.”

In the West Midlands, Sigma opened its Birmingham base in the McLaren Building in 2015 as it expanded from its first offices in Prospect Hill, Redditch.

The company celebrates its tenth anniversary next year and has won multiple industry awards since it was co-founded by Mr Gilburd and chief operating officer Mike Harfield in 2011. It now counts 14 UK energy providers as customers.

Enforcement industry welcomes new rules for recommencing visits

Responding to the Ministry of Justice decision to allow enforcement visits to recommence from 24 August 2020, Russell Hamblin-Boone, chief executive of the Civil Enforcement Association, said: “This is an appropriate response to achieve the balance the government must strike between collecting debts in the name of fairness for the taxpayer, while recognising the vulnerability of some of individuals and families affected financially, socially and healthwise by the COVID-19 pandemic. Enforcement firms have already made a commitment to act sympathetically and in line with the government’s public health guidelines, which will be clearly communicated ahead of an enforcement visit.”