“It’s like that loan shark mentality of, there’s money due to us, we will get it at whatever means, and we don’t care – if that means you’re not able to feed yourself for the next one or two weeks, that’s not our problem.”
Ada, whose car was seized for non-payment of a parking fine, recounts a recent brush with bailiffs, in research carried out by the Enforcement Conduct Board (ECB) – a new agency, tasked with the job of raising standards in this controversial industry.
Catherine Brown, the ECB’s chair, has been swotting up for the role by joining enforcement agents – as bailiffs prefer to be known – out on the doorstep. “It hasn’t been universally impressive,” she says. “Some of them will go around the house knocking on all the windows and trying all the doors.”
One member of the public, Claudia, who had experienced this approach, told the ECB: “That causes nothing but fright for me and I don’t want to face it then, and I’ll run upstairs or something.”
“It’s such a sensitive and powerful thing – having someone come barging around your house,” says Brown, who previously ran the Food Standards Agency. “The fact that there is just no regulatory oversight and no independent oversight at all. It’s just extraordinary.”
But she also has sympathy for many of the agents out doing this difficult work – and in many cases, collecting money on behalf of the taxpayer: council tax debt, for example. “Enforcement is really important. It’s difficult, and nobody likes you. So it’s thankless. Sometimes it’s dangerous.”
The ECB was set up after groundbreaking discussions between an industry keen to bust the stereotype created by shows such as Can’t Pay? We’ll Take it Away!, and debt charities hearing from clients about heavy-handed tactics and frustrated by a lack of government action.
Thinktank the Centre for Social Justice (CSJ) convened discussions between the two sides, resulting in an agreement to create the ECB, and fund it through a levy on the industry.
Ministers have welcomed the new body, and promised to review whether it needs to be put on a statutory footing within two years.
Brown acknowledges the task is urgent. Even before the pandemic gave way to a cost of living emergency, bailiffs were involved in collecting 3m debts a year. Council tax arrears amounted to £5bn by last March.
She says understanding the industry’s business model is crucial. “The enforcement businesses charge their costs and make their money from the people who are in debt. So from a creditor point of view, enforcement feels like a free good,” she says.
The firms are permitted to levy statutory fees for each stage of the process – ranging from £75 for sending a letter, to £235 for visiting the debtor’s home (plus an additional 7.5% for debts over £1,500).
For cases enforced by the high court, the costs can be even higher, reaching £525 for seizing and selling off a creditor’s belongings.
“I think many of the businesses do make every effort to settle at the £75 stage and reduce the cost to the person in debt. But you can see the incentives,” Brown says.
She describes a recent visit to the home of a woman who had already agreed to pay her high court-enforced debt in instalments – ostensibly to check whether she had any assets.
“The individual bailiff said to me: ‘I feel a bit bad about this: because she’s living in social housing, she’s got no car, because we can check that through the DVLA. She’s on universal credit and Pip. So it’s highly unlikely that she’s going to have any assets.’”
Russell Hamblin-Boone, the chief executive of the industry’s trade body, the Civil Enforcement Association (Civea), insists his members would much prefer to resolve things without knocking on the door.
“The more financially viable, as well as better customer experience, is to be able to do it over the phone and emails and texts and things like that.” He is adamant that standards have improved significantly in recent years – and that where customers are vulnerable, his members will refer them back to the creditor.
One of the ECB’s immediate plans is to start collecting quarterly data, including what proportion of debts are resolved at the earlier, less costly stage – and whether some companies are outliers. “It’s really unclear what the scale of the issue is,” Brown says.
Without the statutory backing the debt charities had hoped for, the new agency has no legal teeth – but Brown is urging creditors, many of which are public bodies, to refuse to deal with companies that are not ECB-accredited.
She hopes energy companies, currently under intense scrutiny for sending bailiffs into people’s homes to install prepayment meters, will sign up to the idea of only using ECB-badged firms too. “I haven’t managed to get any traction yet with the utilities companies, who I really think ought to be very committed.”
Over time, Brown hopes this will give the ECB considerable power to set standards. Drawing up clear guidance on acceptable operating practices is another early task.
Despite the deal between charities and the industry that led to the ECB’s creation, she is also having to negotiate for financial backing from enforcement firms. “I hope and I must believe on the basis of their historic assurances that they are going to fund us at a level that enables us to start to get a grip,” she says.
Hamblin-Boone insists funding will be forthcoming, but says the value of the levy will depend on a review of enforcement fees currently being undertaken by the government.
He hopes having the ECB in place will help to improve the industry’s reputation, and encourage people to engage at an earlier stage, instead of binning letters and ignoring phone calls. “Now is the time, when we’re under scrutiny, where people are struggling with household debts, where we’ve got an opportunity to try and get people to engage with us.”
Peter Tutton, head of policy at Step Change, one of the charities involved in the ECB’s creation, says the cost of living crisis makes its role vital. “People are struggling to pay rent, to pay fuel bills, to buy food. In that context, if you go hard to collect off them, what you’re doing is you’re just creating hardship.”
