Do the right thing, Adviser's and creditors experience of best practice ...

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Step 2Using external debt collection agenciesCreditors are responsible for the behaviour ofthe debt collection agency which collects debtson their behalf. These agencies should not beused to protect a creditor’s reputation by puttingcollections at arm’s length.Instead creditors should choose debt collectionagencies by using a range of factors, including thenumber of complaints received about the agency,the number of performing repayment plans thatagency has set up and the specialist services theyoffer to people whose circumstances make it hardfor them to manage money.Creditors should not move accounts between debtcollection agencies when a payment plan is beingmaintained. Instead to promote stability creditorsshould use one agency – as does Provident PersonalCredit which uses CK Edrupt, a firm of solicitors,to administer repayment arrangements on theirbehalf. If accounts are moved between agencies,creditors should make sure that everyone is awareof what is happening. The new debt collectionagency should be given a full account history, andmade aware of any offer of repayment and/or theinvolvement of an advice agency. In addition theperson in debt and any advice agency acting ontheir behalf should be told which debt collectionagency is now acting on the creditor’s behalf andhow payments can be made.Selling debts to debt purchase companiesCreditors are responsible for the behaviourof the firm to whom debts are sold. Debt-sellersshould therefore choose to sell to the firm thatoffers the right price and provides the bestservice to people in debt.For example, Capital One ensures they sellto purchasers who treat their customers to thestandards they have set themselves, and theywill not accept bids from purchasers who donot meet these standards. Capital One thencarries out post sale audits to ensure the debtpurchase company is adhering to their standardsand all relevant legislation, regulatory andself-regulatory regimes.10
Using private bailiffsCreditors are responsible for the behaviour ofprivate bailiffs acting on their behalf. However,the private bailiff industry remains unregulatedand advice agencies continue to report casesof bad practice involving private bailiffs whoenforce council tax arrears, child maintenancearrears, unpaid penalty charge notices andmagistrate court fines.Furthermore, bailiff action itself is stressful andcostly for people in debt, and there is no mechanismby which a distress warrant can be suspended.We therefore believe that private bailiffs shouldbe used only as a last resort.Instead creditors should prioritise direct deductionsfrom benefits, deductions of earnings orders andattachment of earning orders over bailiff action.Or at least use in-house bailiffs who can focuson best practice instead of charging fees, likethe enforcement officers employed by WealdenDistrict Council.If private bailiffs are used, creditors should considerthe AdviceUK, Citizens Advice and LocalGovernment Association council tax arrearscollection protocol, 2 and in particular:• develop processes to intercept cases that shouldnot be sent to the bailiffs, for example whena council tax benefit claim is outstanding• provide people with information that covers thecharges the bailiffs can make and how they canmake a complaint• recognise that people may only engage oncea bailiff has called and establish procedures tonegotiate affordable, sustainable repaymentsand the return of distress warrants from the bailiff• work with stakeholders – including local adviceagencies – to use formal and informal complaintsto monitor bailiff activity and address problemsas soon as they arise. 2. For details of the council tax arrears collection protocol see:citizensadvice.org.uk/council-tax-arrears.htm11
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