New service to help people in “persistent debt” on credit cards

Over a million people are expected to receive communications from their credit card providers by the end of March asking them to increase their payments. StepChange Debt Charity has today launched a dedicated new online information and guidance hub and an interactive credit card repayment calculator for people receiving these “persistent debt” letters.

People who have paid more in interest and charges over a 36-month are receiving letters from their lenders explaining that they now need to enter into repayment plans to pay down their debt, in line with the rules that the Financial Conduct Authority has introduced to try to help get people out of expensive long-term credit card debt. If they don’t respond to their lender’s communication, and don’t increase their payment, lenders are likely to stop them using their card.

The new guidance hub is backed up by a dedicated telephone advice team, supported financially by the Money and Pensions Service.

The charity is encouraging credit card providers to refer their customers to the new service when sending their communications to customers, recognising that some people may find it difficult to know where to start and may need independent support to start addressing their persistent debt. A number of lenders are already signposting the new service in their letters to customers.

Some people will be able to afford higher repayments and will be able to pay down “persistent debt” card balances over a three to four period. Others may struggle to increase their payments to this level. Where this is the case the credit card lender must offer forbearance – the nature of which may vary.

It’s important that people respond to their lender’s communications. If they don’t, lenders may stop them using their card. However, it’s also vital that any arrangement people enter into with their card provider is affordable.

StepChange says it’s crucial to consider affordability in the round. If people have multiple cards with multiple lenders all asking them to increase their repayments, there is a risk that people agree to repayment schedules that could turn out to be unrealistic. This is where independent guidance is particularly valuable.

What people should do will depend on their circumstances and what they can afford. If they are meeting at least the contractual minimum payments on their card they should not see their credit record damaged, but their lender may stop them using their card.

Phil Andrew, CEO of StepChange Debt Charity, said: “Getting this sort of guidance will help people work out a realistic budget from which to decide whether proposed repayment plans are affordable or not. If they are, all well and good. If not, we can then help by offering more detailed advice and solutions depending on people’s individual circumstances.

“Reaching people earlier is the future of debt advice. If we can shift the dial so that more people get the help they need at the first sign of any possible trouble rather than later when problems have become entrenched, we stand a real chance of turning the tide on what currently feels like a never-ending rise in the number of people reaching a crisis point.”

Comment regarding Government’s new ‘breathing space’ scheme

Following on from the announcement yesterday of the Government’s new ‘breathing space’ scheme, Money Guru has issued a comment on what this will mean for those in debt.

Deborah Vickers, Channel Director for Money Guru, said: “The Government’s new ‘breathing space’ scheme set to be introduced in 2021 is good news and will offer a lifeline to anyone struggling with debt. It will support vulnerable consumers and takes a proactive approach to support people who take on debt.

“The scheme’s benefits include a 60-day interest freeze and also stopping any action from creditors, which will give people more time to get the help they need.

“Breathing Space will also give someone in problem debt the right to legal protection from the creditors while they receive debt advice and enter an appropriate debt solution. The plan enables someone in problem debt to enter a statutory agreement to repay their debts to a manageable timeline.”

FLA comments on the Government’s new Breathing Space announcement

Commenting on the Government’s new Breathing Space period, Fiona Hoyle, Head of Consumer and Mortgage Finance at the FLA, said: “Today’s announcement by the Government of a statutory 60 day breathing space will extend to those with council tax and utility debts, the same type of protection that has been available to consumer credit customers for some years under the Financial Conduct Authority’s very successful Breathing Space scheme.

“The challenge now is for Government, the FCA and the consumer credit industry to work out how the two schemes can coexist without creating confusion for consumers or expensive duplication for lenders.”

Phoebus Software donates more than £10,000 to local charities in 2019

Phoebus Software Limited (PSL), the Solihull based software company donated £10,500 to charity last year with £7,500 going to Acorns Childrens’ Hospice. The other £3,000 was donated to charity initiatives carried out by PSL’s clients including children’s charities My Shining Star and Winston’s Wish. The amount raised was more than five times the target set by its charity committee and the staff have already voted to support Acorns Children’s’ Hospice again in 2020.

Acorns is based in Selly Oak, Worcester and Walsall. It provides palliative nursing care and support for to babies, children and young people aged 0 – 18 years. All the children it looks after have life-limiting or life-threatening conditions and associated complex needs, and it provides tailored nursing care to each child with support for their families including short breaks, emergency and end of life care.

PSL staff voted for Acorns to be its charity of the year. In order to get its staff more engaged in its charity work, PSL leadership team invested in a charity committee at the beginning of last year. Six staff members were voted onto the committee and now devote time during work hours to focus on Corporate Social Responsibility (CSR) and community. The PSL Charity Committee set a fundraising target of £2000 for 2019 but instead raised £5000, more than double the target. PSL itself then added £2,500 to the amount raised by staff and contributed to a number of its client’s charities.

The charity initiatives organised by the committee aimed to involve as many staff as possible. They included charity football, the mentally and physically challenging Wolf Runs and 3 Peaks Challenge.
Wanting to ensure everyone can be involved, other less physical challenges have included Movember, pool and table-tennis competitions, fantasy football, sweepstakes for the rugby and grand national, a swap shop and a bake-off.

But the local charitable giving didn’t stop at the £10,500, other events have included:

  • Five collections for local foodbank ‘Sparkhill’, including one around Diwali
  • PSL giving staff more time to participate in charitable activities – e.g. days out of the office to participate in community gardening projects
  • Company sponsorship and donations
  • Company prize donation to numerous client charity raffles and auctions
  • Staff volunteering time to teach coding skills to disadvantaged young people
  • PAYE donations from staff who want to contribute to charity directly from their pay.

In addition to its local and national fundraising, PSL also supports charities across the world. This year will be the tenth year it has supported not-for-profit organisation Kiva. Kiva helps alleviate poverty by providing small loans to improve the working or living environment of people in the developing world.

Phoebus Software Limited’s sales and marketing director Richard Pike, says, “Doing the right things in the right way is at the heart of what Phoebus is about. We have always taken our commitment to the community and to charity very seriously but the appointment of the PSL Charity Committee has really focussed our efforts. The committee have done an outstanding job over the past year and staff throughout our business have been fully engaged not only in raising money but also giving their time to help charities and those less fortunate than ourselves.”

AmTrust complete Italian capital relief transaction

AmTrust International, the Europe-wide private mortgage insurer, has today announced the completion by its Mortgage & Credit division of a capital relief transaction on a €1bn residential mortgage portfolio originated by one of Italy’s top banks.

The solution developed by AmTrust is new to the Italian market and allows the implementation of a significant risk transfer mechanism through an effective insurance solution.

The solution highlights the increasing role of specialised insurance companies as investors in the banking system, offering lenders an efficient alternative to manage and diversify their capital base.

Angel Mas, Managing Director of AmTrust International’s Specialty Business Unit, said: “AmTrust is proud to continue helping the European banking system thanks to its extensive experience in mortgage and credit insurance.”

Patrick Bamford, Business Development Director, added: “In Italy we have been offering credit insurance solutions to Italian banks since 2002. We aim to continue supporting the banking sector across Europe, developing flexible and innovative solutions suited to the challenges of a changing market and regulatory environment.”

Money Advice Trust responds to FCA’s letter to credit card firms

The Money Advice Trust has responded to the Financial Conduct Authority’s (FCA) letter to credit card firms that reviews their approach to borrowers stuck in persistent.

The letter outlines a number of concerns and areas firms need to review to ensure their communication and interventions with customers in persistent credit card debt at the 36 month point meets the expectations of the regulator.

Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “These new rules from the FCA are ultimately designed to help people struggling with persistent credit card debt, and the regulator is right to have an eye on unintended consequences. It is crucial that credit card firms get this right – including by offering sustainable repayment options and forbearance where necessary. A ‘blanket’ suspension of credit cards risks inadvertently making the financial situations of some customers worse, and the regulator is right to warn firms against this approach.

“We welcome the FCA’s reminder of the role of free debt advice in this complicated process, as many customers will be receiving letters from multiple credit card providers and may have other debts too.

“It is crucial that anyone receiving these letters engages with their credit card provider as soon as possible, and that firms signpost their customers to receive free, independent debt advice on the whole of their debt situation where necessary.”

StepChange welcomes FCA reminder to credit card firms on how to treat persistent debt

The Financial Conduct Authority has today issued a reminder to firms about its expectations of how they communicate with people and treat them if they have persistent debt on their credit cards at the 36-month point where further intervention is triggered. Between one and two million people will shortly be receiving these letters.

StepChange head of policy Peter Tutton commented: “It is helpful to see the FCA reminding firms of their responsibilities under the new rules.

“The FCA is unequivocal that firms should not cancel people’s cards wholesale. We particularly welcome the regulator telling firms to include in their letters a reminder that forbearance is available if people cannot afford what is suggested, and that they should signpost to independent advice, especially for those receiving letters from more than one card provider.

“Charities like StepChange can help. We have been working with creditors to ensure they know the services we can provide for customers receiving these letters. Our new online advice hub for persistent debt will ensure that everyone receiving these letters has somewhere to turn for independent information and guidance on what to do next.”

The Right Mortgage and Protection Network celebrates half a decade of success this month

The Right Mortgage and Protection Network is celebrating half a decade of supporting the UK’s mortgage and protection brokers, and firms, in all areas of business.

In their five years of business, the Network has come a long way and, alongside supporting growing Network members, they have also set up several group companies to broaden the Network’s expertise across the financial services marketplace.

This fantastic achievement from the Network also comes alongside one of their members, Bob Burnside, celebrating half a century in the financial services industry. Bob joined the Network when it was set up five years ago, and continues to be a supporter of not only the Network, but their admin service, which helps him deal with his day to day role as an adviser.

The Network’s product range includes mortgages, protection, later life lending & equity release, private medical insurance, general insurance, Wills & LPAs, and secured loans.

They are also proud to have secured relationships with the top lenders and providers in the market in order to provide their members with a holistic proposition to support their businesses.

Martin Wilson, CEO at The Right Mortgage had this to say about their achievement: “We’re proud of the continued growth and success of our network over the last five years, but we would not have been able to achieve our goals without the work of our dedicated staff, and, of course, our members and provider partners, many whom have been with us from the very start.”

Adam Stretton, Managing Director at The Right Mortgage also commented: “Over the past five years, as we’ve grown and evolved, so have our products and services. We’ve also had the pleasure of watching our members grow with us, and are excited to see what will happen in the future.”

As their Network continues to grow, they remain focused on continuing to keep advisers at the heart of what they do, and continually ask for feedback from their members to improve their service, which is why they’re aiming to cap their membership at 500.

FORS becomes official Supporter of mental health charity Mates in Mind

FORS has become an official Supporter of the national Mates in Mind charity and is encouraging its members to prioritise employee mental health as a staff safety issue.

FORS has announced Mates in Mind as a new FORS Associate and hopes the link with the charity will further reinforce the need for operators across road transport to take mental health concerns as seriously as other staff safety considerations.

FORS Associate products and services align with the FORS principles of safety, efficiency and environmental protection. FORS Associates offer discounts to help members meet the requirements of the FORS Standard.

As a FORS Associate, Mates In Mind will offer all FORS members access to employer mental health guidance resources and regular news updates regarding the latest developments in mental health in the workplace.

In addition, FORS members who choose to become Mates in Mind Supporters themselves will be able to access a broad range of Mates in Mind services and support, offering a flexible range of options to help them to take-action in line with their business priorities and needs. This includes an assessment piece, general awareness training courses and a suite of tools and communications resources to support their own bespoke programmes.

Mates in Mind was set up by the Health In Construction Leadership Group (HCLG) and is supported by the British Safety Council in its aim to provide industry employers with guidance to support the mental health of its workforce.

Initially established to improve mental health within the UK construction industry, Mates in Mind’s services have now expanded across various supply-chain and related industries. The charity hopes to extend their expertise to organisations across road transport as a FORS Associate.

Martin Lockham, Growth Development Manager at Mates in Mind said, “Working alongside programmes such as FORS, Mates in Mind is able to deliver the support, education, resources and materials organisations need to improve the mental health of their workforces.”

“The FORS values reflect our belief that there is no health without mental health and that in order to achieve exemplary levels of best practice in safety, efficiency and environmental protection, we must include addressing mental health. As a FORS Associate, Mates in Mind will help build on FORS’s existing minimum accreditation requirements for members to have a mental health policy in place.”

When joining Mates in Mind as Supporters, FORS members will receive guidance from the charity, to help create, implement and build on mental health policies and procedures in order to achieve and maintain the health requirements as set out in the Standard.*

Sonia Hayward, FORS manager said, “FORS understands that mental health is a vital component of driver and operational safety and we are proud to welcome Mates in Mind as a FORS Associate to offer their expertise and services to our members. The joined-up programme offered by Mates in Mind will provide our members with the knowledge they need as they seek to support their own mental health, and that of their employees.”

StepChange appoints new head of strategic relationships

StepChange Debt Charity has appointed Vanessa Northam, previously head of external affairs at Tully, part of the Openwrks Group, as its new head of strategic relationships.

She will join the charity on 3 February, reporting to Vikki Brownridge, Director of Charity Development. Vanessa and her team will be responsible for managing and developing existing and new relationships between the charity and its partners. Around 900 organisations currently support the charity in some way.

Vanessa has an extensive background in developing practical approaches between organisations and vulnerable customers. At Tully, she has been responsible for creating a host of new relationships, across multiple sectors and in addition, ensuring the development of Tully fully supports vulnerable consumers.

Vanessa’s previous roles have included leading E.ON’s UK vulnerable customer programme, as well as roles within EDF Energy, Capital One Bank, and a year in consultancy advising organisations across the financial services and utility sectors on the needs of vulnerable customers.

Phil Andrew, CEO of StepChange, said: “We’re delighted to welcome Vanessa, whose experience will provide us with fresh new ways of delivering efficiency benefits to our strategic partners, while keeping the interests of our clients firmly front and centre.

“Vanessa’s fintech experience will enhance our ability to build partnerships with organisations such as OpenWrks/Tully to develop more engaging ways to work with our clients and partners.”

Vanessa Northam said: “I’m excited to be joining StepChange at a time when the charity is on the cusp of reaping the benefits of technology improvements, both in how we will partner with organisations to deliver an outstanding service, and in terms of internal transformation and efficiency. With so many people out there needing debt help, good partnerships are part of the key to unlocking efficiency and the ability to help more people.”