Consumer debt judgments hot record high

More county court judgments (CCJs) were registered against consumers in England and Wales during Q1 2018 than any other quarter since current records dating back to Q1 2005 began, according to figures released today by Registry Trust.

Registry Trust is the Registrar of Judgments, Orders and Fines in England and Wales (on behalf of the Ministry of Justice). In addition, it collects, verifies and publishes judgment information from jurisdictions across the British Isles and Ireland. A judgment is incontrovertible proof that debt has not been managed successfully.

Credit reference agencies licensed by the Trust receive daily updates on judgments. This information affects lenders’ readiness to offer credit and can lead to difficulties with loans and mortgages as well as higher borrowing costs.

During Q1 2018, 305,877 judgments were registered against consumers in England and Wales – over double the 150,622 consumer CCJs registered during Q1 2005. Rising two percent on the first quarter of 2017, the total number of adverse CCJs has risen year-on-year for the past five years.

The average CCJ remained stagnant, decreasing just £6; the median CCJ also remained close to Q1 2017’s figure, dropping just two percent in value.

As a result, the total value of consumer CCJs marginally rose two percent.

In the High Court 44 judgments (HCJs) were registered against consumers in Q1 2018. The total value of HCJs soared by £100m to £115.2m. The scale of this increase was largely due to a single judgment worth £84.5m. By contrast, the median HCJ stood at £139,921 for the quarter.

In Q1 2018 Registry Trust received 56,881 requests to search the register for England and Wales online at www.trustonline.org.uk. TrustOnline allows anyone to search for judgments and similar information registered against consumers and businesses in jurisdictions across the British Isles and Ireland.

Statistics

CCJs against consumers Q1 2018 (compared with Q1 2017)

  • Total: 305,877 (up two percent)
  • Total value: £455.5m (up two percent)
  • Average: £1,489 (down £6)
  • Median: £684 (down two percent)

High Court judgments against consumers Q1 2018

  • Total: 44 (up nine)
  • Value: £115.2m (up £99.6m)
  • Average: £2,618,908 (up £2,172,600)
  • Median: £139,921 (up £54,921)

Adjusted High Court judgments against consumers Q1 2018*

  • Total: 43 (up eight)
  • Value: £30.8m (up £15.2m)
  • Average: £715,759 (up 60 percent)

Decision to step back from logbook loan reform ‘deeply disappointing’

The government’s decision not to introduce its Goods Mortgages Bill has been described as ‘deeply disappointing’ by the Money Advice Trust, the charity that runs National Debtline.

The Bill, announced in the June 2017 Queen’s Speech, was drafted by the Law Commission following a comprehensive review commissioned by the Treasury in September 2014 and published two years later. It had been expected to be passed into law via special Parliamentary procedures that exist for uncontroversial Law Commission Bills of this kind.

Instead, the government announced it “will not introduce legislation at this point in time”, and will instead “continue to work with the FCA as they carry out their high-cost credit review, and then further consider government action on alternatives to high-cost credit” in light of its findings.

Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline, said: “The government has snatched defeat from the jaws of progress by deciding not to introduce its Goods Mortgages Bill – a deeply disappointing decision, particularly given how uncontroversial the proposed reforms were.

“The government was right to ask the Law Commission to look into this issue back in 2014, and since then a significant amount of work has gone into producing a Bill that had widespread support – only for it to fall at this final hurdle. We hope the government will reconsider.

“In the meantime, the urgency of addressing problems in the logbook loan market remains. It is now even more important that the FCA takes immediate action to improve consumer protections in this industry – and gives a clear statement of its intent as soon as possible.”

Bills of Sale are commonly used to secure a ‘logbook loan’ on goods you already own – usually a car – and are a form of high-cost lending based on legislation that dates back to the 19th century. The advice sector has repeatedly raised concerns about consumer detriment arising from this type of lending.

GMB welcome news of rising wages in London but says there is still a long way to go

News that wages have risen is welcome but there is still a very long way to go to make up the ground lost due to the recession in 2008 and inflation since then, says GMB London

GMB London have welcomed new statistics from the Office of National Statistics, which shows wages rising at an annual rate of 2.9% in the three months to March, faster than the 2.7 % inflation, but cautioned that there was a very long way to go before earnings in London recover from the drop of 15.2% compared to earnings in 2007.

A study of official data by the GMB from January 2018 showed that in London, full-time workers mean gross annual pay in 2017 was just 84.6% of what it was in 2007. In 2007 the mean gross annual pay of full-time workers was £42,226. In 2017 that figure was £47,089, which when you factor in inflation at 31.7%, saw a decrease in pay of 15.4%.

Over the same period the decrease in earnings in the United Kingdom was 10.4%. In 2007 full-time workers mean gross annual pay in the UK was £30,015. By 2017 the figure was £35,423. After inflation, this is just 89.6% of what workers were earning in 2007
The full-time workers gross annual pay in Hillingdon in 2017 was just 75.2% of what it was in 2007. This was the biggest decrease in the London region. It was followed by Hammersmith and Fulham at 78%, followed by Sutton 79.5%, Westminster 79.6%, Southwark 80.2%, Islington 81.3%, Tower Hamlets 81.4%, Ealing 81.9%, Harrow 85.3%, Havering 86.6%, 87.7%, Camden 87.7%, and Enfield 88.2%. Lewisham and Richmond upon Thames were the only boroughs that saw earnings increase over the 10-year period.

The figures covering 33 London councils are set out in the table below, ranked by the highest percentage drop since 2007. This is from a new study by GMB London Region of official data from the Office of National Statistics (ONS) for 33 councils in London. It compares full-time workers mean gross annual pay in 2007 and 2017, followed by 2017 earnings as a percentage of 2007 earnings after inflation.

Results for 2003 and earlier exclude supplementary surveys. In 2006 there were a number of methodological changes made. For further details go to: http://www.nomisweb.co.uk/articles/341.aspx.

Estimates for 2011 and subsequent years use a weighting scheme based on occupations which have been coded according to Standard Occupational Classification (SOC) 2010 that replaced SOC 2000. Therefore care should be taken when making comparisons with earlier years.

Warren Kenny GMB Regional Secretary said:

“GMB welcome this news that wages have risen but there is still a very long way to go to make up the ground lost due to the recession in 2008 and inflation since then.

“Earlier this year GMB showed that across London as a whole the real value of average wages for workers resident in the region in 2017 was only 84.6% of the buying power they had in 2007 when inflation is factored in. Indeed residents in 8 of the 29 London boroughs that we received data from, fared much worse than this with residents in some areas very badly hit.

“Two conclusions can be drawn from the study. The first is that the impact on the living standards of ordinary workers of the bankers recession in 2008 onwards is still with us a decade later. Not a single person has been punished by a prison sentence for the recklessness and law breaking that has had catastrophic consequences as these figures show. The Panama Papers and the Paradise Papers show that tax evasion and tax avoidance are still going ahead undealt with on an industrial scale.

“The second conclusion is that ordinary workers require substantial pay increases to make up the lost ground. These increases are needed to boost spending power to keep economic growth on track.”

New Collective Redundancy & Insolvency Guidance ‘Very Positive’ – R3

The Government’s proposed new guidance for consulting on collective redundancies in insolvency situations is ‘very positive’, says insolvency and restructuring trade body R3.

Following a number of high-profile insolvency cases where employees were made redundant without the full statutory consultation period, the Government has been looking at reforms which could be made to redundancy consultations.

R3 has long called for reform so that inevitable clashes between insolvency and employment law can be resolved. The Government’s proposed guidance could help get a better deal for employees, employers, insolvency practitioners, and the taxpayer.

Caroline Sumner, R3’s technical director, says: “The Government’s recognition of the difficulties faced when consulting on collective redundancies in insolvency situations is very positive. Having called for reform for a number of years, we’re pleased to see action finally being taken.

“We’re also pleased that the Government understands that new guidance rather than regulation is needed. Additional regulation would have compounded the problems in an already complex area.

“Recognising that insolvencies are a special situation and that they require different approaches to redundancy consultations is a pragmatic step. The current situation does not work for employees, employers, the taxpayers, or insolvency practitioners. New guidance will help get a better deal for everyone.

“Collective redundancy consultations are required by statute but the special nature of insolvencies, and the speed with which they happen, often result in an inability to undertake the full consultation process. A full consultation requires an alternative to redundancy which often isn’t there when a company has failed. The cost of keeping staff on and running the consultation means less money can get back to creditors, but maximising creditor returns is one of the primary goals of an insolvency procedure. Not making staff redundant quickly could prevent them from accessing benefits or applying for new roles, trapping them in a situation where they’re not being paid by their insolvent employer.

“The difficulty in resolving these issues often means significant ‘protective awards’ are made to employees by Employment Tribunals. These costs are typically met by the taxpayer in the first instance rather than the insolvent company. It’s just not clear who the existing set-up is meant to help.

“Guidance will help resolve some of the issues which exist between employment and insolvency law and we look forward to working with the Government to ensure the new guidance is a success.

“Insolvency practitioners should try as far as they can to consult on redundancies, and this guidance will help them do that.

“While the Government says it will consider regulation in future, we should see how the guidance works first. Insolvency practitioners find themselves in an impossible position when caught between employment law and the realities of an insolvency, so additional regulation would have led to punishment for practitioners trying to do their jobs with few alternatives.”

Background

Under employment law*, in situations where there will be more than 20 redundancies in one location, there must be at least 30 days’ consultation for employees before the first redundancy is made (45 days for 100+ redundancies). This can cause problems in insolvencies, particularly where a company has failed because:

  • The cost of retaining employees while consulting – and running the consultation – can exhaust the company’s remaining funds. The depletion of funds can make business and job rescue unviable and it makes it difficult for insolvency practitioners to comply with their obligations under insolvency law to maximise returns to creditors. Serious threats to creditor returns could also threaten businesses’ confidence to lend and trade.
  • An insolvent company may not have the funds to pay employees while consultations take place.
  • When a company has failed without prospects for rescue, this can leave employees ‘trapped’: if they resign from the company to seek new work they risk losing redundancy benefits (e.g. statutory redundancy pay, paid by the government); if they stay, they face at least a month without pay.
  • When a company fails, no meaningful consultation can take place: there is no realistic alternative to redundancies. In these circumstances, a 30- or 45-day consultation serves little practical purpose.
  • In an ideal world, redundancy consultations would start before a company becomes insolvent.
  • However, company finances can deteriorate very rapidly in some cases, making this difficult.
  • Insolvency situations can also be fast-moving and unpredictable, making formal consultation processes difficult to manage.

When claims are brought before the Employment Tribunal for a failure to consult, a significant ‘protective award’ may be made against the company for the benefit of employees. However, because the company is insolvent, the award is paid by the taxpayer, who then becomes an unsecured creditor in the insolvency process.

*Trade Union and Labour Relations (Consolidation) Act 1992

Second charge mortgage new business stable in Q1 2018

New figures released today by the Finance & Leasing Association (FLA) show that second charge mortgage new business fell 10% by value and 13% by volume in March, compared with the same month in 2017. In Q1 2018 as a whole, new business increased 1% by volume compared with the same quarter in 2017.

Fiona Hoyle, Head of Consumer and Mortgage Finance at the FLA, said: “March was a quieter month for the consumer credit markets in general. These latest figures show a stable picture for new business volumes in the first quarter overall.”

Consumer motor finance new business falls 5% in March

New figures released today by the Finance & Leasing Association (FLA) show that new business in the point of sale (POS) consumer car finance market fell 5% by value and 10% by volume in March, compared with the same month in 2017. In Q1 2018, new business grew 3% by value, while volumes fell by 1% compared with the same quarter in 2017.

The POS consumer new car finance market reported a fall in new business in March of 9% by value and 15% by volume, compared with the same month in 2017.

The percentage of private new car sales financed by FLA members through the POS was 89.4% in the twelve months to March, up from 88.5% in the same period to February.

The POS consumer used car finance market reported new business up 4% by value in March, while volumes fell by 1%, compared with the same month in 2017.

Commenting on the figures, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said: “Trends in the new car finance market in the first quarter of 2018 are likely to have been affected by the impact on demand for private new cars in Q1 2017 of changes to vehicle excise duty introduced in April that year. However, in the first quarter of 2018, point of sale consumer car finance new business volumes overall were only 1% lower than in the same period in 2017.”

MBA appoints Former Adere Director

MBA-Group strengthens the team by appointing New Business Sales Director Martyn Viquerat in support of our continued investment in digital technology and wider communication services.

Joining the team in Warrington as New Business Sales Director is Martyn Viquerat. Martyn brings a wealth of sales management experience and knowledge to the company from across the industry this includes driving sales, business development and delivering organic growth.

His previous successes include leading sales teams at CDMS/Transactis, R.R Donnelly and most recently Adare SEC. His successful approach to market secured multiple high value transactional BPO contracts.

Martyn’s brief is to build a strong transactional bid team in support of our continued investment in digital technology and wider communication services. The planned growth in Warrington will also provide a broader geographical presence and will reunite Martyn with his previous CTO Martin Taylor who joined MBA from Adare 18 months ago.

He says “I’m delighted to join the team at MBA-Group”.

“The entrepreneurial leadership together with ground-breaking technology and a genuine focus on customer service were critical factors that made the decision to join an easy one! With the capability, commitment and culture at MBA, I’m looking forward to an exciting and successful time by growing the team and getting on with the task of meeting up with clients and associates, old and new.”

Commenting on the new appointment, MBA Group Sales Director Kevin Stewart added, “we’re thrilled to welcome Martyn to the team – an excellent addition in terms of his great experience and expertise in driving sales and delivering new business growth. His thorough knowledge and established relationships will quickly help to expand our current service offering to a broader audience.

Following his appointment, our team is now stronger than ever before and we’re proud to welcome Martyn onboard to help deliver an enhanced service to our customers.

Over half of under 45s interested in banking products from Apple, Amazon or Google

Online research from Equifax, the consumer and business insights expert, reveals over half (51%) of Brits under 45 years old would be interested in banking products or services from technology giants like Apple, Amazon or Google.

Of those, 45% said that products or services like loans, credit cards or current account from these technology companies would only appeal to them if they offered better value than their existing bank.Across all age groups, the level of interest in banking products from leading technology firms falls to 40%, with over a quarter (27%) of Brits stating they would rather use their existing bank as they’re more familiar with them.

Jake Ranson, Banking and Financial Institution expert and CMO at Equifax Ltd, said, said: “The recent announcement that Apple is joining forces with Goldman Sachs to launch a consumer credit card highlights how tech companies plan to shake up the banking industry, creating products and services to compete against the big high street banking names as well as newer digital entrants.

“Although a sense of brand familiarity pins many people to their current bank, there’s an appetite for new products and a desire for alternatives that can offer something genuinely different. The tech giants have a loyal brand following in their own right, if they can combine this with a competitive product offering we’ll see an interesting shift in dynamics as the fight to attract customers heats up.”

Fast-growing Yorkshire entrepreneur scoops industry award

A Sowerby-Bridge based finance management specialist has won a prestigious regional industry award.

Martin Mellor, founder and managing director of Mellor Financial Management, has won the ‘advisor of the year’ award in the inaugural Yorkshire Accountancy Awards 2018.

The ceremony, which took place at New Dock Hall in Leeds on Thursday 10 May, saw more than 300 people in attendance to celebrate accountancy achievements across the Yorkshire region.

Having recently celebrated its third year in business, Mellor Financial Management has experienced a 400% increase in revenue and continuous year-on-year growth.

Founded in 2015, Mellor Financial Management works with a range of businesses across industries including manufacturing, professional services, retail, hospitality and events.

The Yorkshire Accountancy Awards has been developed to celebrate the achievements of local small, mid-tier and large firms operating in the financial sector.

With more than 20 years of industry experience, Martin has provided services that have helped more than 15 clients which has supported more than 500 individuals since setting up Mellor Financial Management. The company has assisted companies to transform the finance side of their business, plan for future growth and maintain effective cost management systems.

Founder of Mellor Financial, Martin Mellor, commented: “Winning the advisor of the year award was a real privilege. We aim to do things differently by not only partnering with our clients but becoming embedded into their team to support them on their journey for growth.

“It has truly been a phenomenal year for Mellor Financial, we’ve recently celebrated our third year in business and have demonstrated year-on-year growth, so to win this award really means so much as recognition for the hard work put in over the last three years.”

Leading pharmaceutical wholesaler agrees £8m funding with Bibby Financial Services

Bibby Financial Services (BFS) has provided an £8 million asset-based lending facility to Veenak International Limited, one of the UK’s leading wholesalers of pharmaceutical and healthcare products.

Established over twenty years ago, the company is at the forefront of pharmaceutical export, import and wholesale activity, and has an established and expanding client base in the UK and Europe.

The business, based in Birmingham, provides a wide variety of medicines, medical devices and disposables such as bandages, dressing and syringes. Its products can be found in pharmacies and healthcare practices across the UK and Europe, including Germany, Italy, Netherlands, Spain and Ireland.

Veenak’s expertise in negotiating import and export regulations efficiently, providing its customers with the medical products they need quickly, has driven demand for its products over the years. Veenak has ambitious plans for the future and is aiming to increase revenues from £28 million in 2017 to over £35 million by 2019. To facilitate this growth, Veenak required additional working capital to serve an ever-increasing number of customers.

The business spoke with BFS’s Corporate team, which was able to structure a bespoke funding package for the business in a short timescale. The new facility provides Veenak with the flexibility to quickly access cash as and when it needs to, allowing it to serve more customers and invest in the future growth of the business.

Shan Hassam, Group Managing Director at Veenak International Limited, said: “We strongly believe that sourcing the medicines and supplies needed by the healthcare sector should be a streamlined and hassle-free process. To achieve this, our business must operate at maximum efficiency and our ability to access cash quickly is an integral part of that.

“The facility from BFS provides us with working capital that we can rely on when we need to. The BFS Corporate team demonstrated an in-depth understanding of our business and its needs and built a facility around that. With this new facility in place, we can focus our efforts on working to expand our customer base and growing the business.”

Chris Sygrove, Corporate Manager at Bibby Financial Services, said: “Veenak is built around efficiency and its success and growth to date hinges on its ability to provide medical supplies and pharmaceuticals in a timely fashion. It is an ambitious business managed by a first-class team and we’re excited to work alongside the company, providing the funding it needs to grow.

“We’re a relationship based funder, and this means that we get to know our clients’ businesses so we can tailor a funding package suited to their specific needs. We look forward to helping the business realise its growth ambitions in the future.”

Ben Smith, UK Corporate Sales Director, said: “This exciting new deal is a great example of our ability to work to our clients’ timeframes and provide flexible funding that suits their needs. In recent years, we have made significant additions to our Asset Based Lending capability which now includes Stock Finance, Foreign Exchange and Asset Finance.

“As a result, we are able to offer a greater range of financing options to our clients, providing them with the working capital they need to expand in both domestic and international markets. The BFS Corporate team has structured more than 600 deals across the UK since 2013, and we look forward to supporting even more businesses over the coming years.”