CM magazine May 2018

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CMNEWS A round-up of news stories from the world of consumer and commercial credit Written by – Sean Feast and Alex Simmons CSA warns of unintended consequences of new debt guidelines Peter Wallwork Chief Executive of the CSA NEW guidelines for debt advisors could keep customers in debt for longer by failing to reflect their true financial position, a leading trade association has warned, and in the worst case push them into unnecessary and potentially damaging insolvency. The Credit Services Association (CSA) believes that the revised guidelines – presented by the Money Advice Service (MAS) for use with the Standard Financial Statement (SFS) – require further consideration, and has called for an early review. Peter Wallwork, Chief Executive of the CSA, says that while the thinking behind the recent changes to the SFS are laudable, the outcomes could be disastrous for some consumers: “The issue centres around the so-called ‘trigger figures’ and whether the increased figures now being proposed accurately reflect the customer’s true financial position,” he says. The SFS is a tool primarily used by debt advisors to summarise a person's income and outgoings, along with any debts they owe. It provides a single format for financial statements, allowing the debt advice sector and creditors to work together to achieve the right outcomes for people struggling with their finances. However, in a meeting of the SFS Governance Group, which includes the CSA, members were presented with a set of revised ‘trigger figures’ that in some cases were 30 percent or more greater than those published last year. “The challenge to MAS is that if these new figures turn out to be wrong, advisors and creditors alike will quickly lose confidence in the system and stop using it. The challenge, also, is to ensure consistency amongst advisors and stop anyone from using the guidance as an ‘allowance’, in which case the customer’s true financial position becomes distorted. “At best, this will reduce the volume and value of arrangements and offers from customers to repay their debts and keep them in debt for longer. In the worst case, however, the figures may suggest that a customer is better to go bankrupt when they don’t need to. “This is unlikely to be in their best interests – it will all-but destroy their chances of ever being granted credit again – and is definitely not in the interests of the creditor. There is even a question mark as regards whether keeping a customer in debt for longer by inaccurately assessing their financial position satisfies the principles of a ‘fair outcome’.” In fairness to the advice sector, Mr Wallwork explains, MAS has sought to reassure creditors that the revised figures are simply a guide and should not form the starting point for any assessment of expenditure. But he questions whether the previous trigger figure levels really needed fixing at all: “Statisticians from MAS have used a method of calculation that appears to differ from previous methodologies and is at odds with the methods used in Scotland, but they are adamant that their calculations are accurate and reflect the impact of inflation, Universal Credit, and households with a second adult. While the CSA continues to support the SFS in principle, the accuracy of these figures is essential. “Everyone wants to work from an agreed set of numbers that are fair and appropriate,” Mr Wallwork concludes, “and the CSA call upon all advisors to use the SFS in the spirit it was intended; any new figures must be given as a guide, and not an allowance.” csa-uk.com >TICK IN THE BOX VOTING for the CICM Advisory Council elections is now underway. Of the 23 vacancies available, 11 regional representatives will be elected alongside those with specialisms in trade credit, consumer credit, international credit, and credit services. Visit cicm.com or email elections@cicm.com to find out more. cicm.com/election-2018 >CONTROLLERS FEEL UNDERPAID PORTFOLIO Credit Control has published the results of its 2017/2018 salary survey which revealed that many credit experts are feeling underpaid for their efforts. Just 16 percent gave five stars while 48 percent of respondents rated their satisfaction three stars or less. The average salary for a credit controller is £29,735 per year, but this figure can differ depending on where they are working. For example, a credit controller based in London Zone one can expect to earn an average of £27,000 each year. Yet, those working in Bedfordshire can expect this figure to decrease to £24,000. portfoliocreditcontrol.com The Recognised Standard / www.cicm.com / May 2018 / PAGE 6
CYBG increases lending despite poor business environment CLYDESDALE and Yorkshire Banks (CYBG) has lent over £2.1 billion to the UK’s SMEs as part of the bank’s commitment to help fuel SME growth by lending small firms £6 billion in the three years to 2019. CYBG’s lending comes despite the bank’s quarterly ‘SME Health Check Index’ that reported the worst business health reading for the UK SME market since 2014, as a dip in confidence and a lack of borrowing take their toll. SMEs’ lack of confidence and their reduced borrowing appetite are key drivers behind the Index fall, with lending down 3.7 pecent to £92.5 billion to Q3 2017), bank lending to SMEs fell by £1.9 billion, or two percent. Encouragingly, UK Finance data published at the end of February shows that lending to SMEs has stabilised in the final quarter of 2017, but firms delaying investment decisions remains a concern. In recent research conducted by the bank, SMEs were specifically asked about the ‘main barriers’ to scaling up their businesses – over a fifth (22 percent) of SMEs cited access to finance as a barrier. The research also found that among SMEs who would Keepie uppie FORMER Manchester United and Real Madrid striker Michael Owen has launched a cryptocurrency, the ‘Owen Coin’, joining other famous sportsmen including Manny Pacquiao in a new venture to connect with fans. The retired England star launched his investment in the Singapore-based Global Crypto Offering Exchange (GCOX). The celebrity tokens will allow fans to buy merchandise such as personal training videos, make donations to charities and even interact with the ex-sportsman via live-streaming. Filipino boxer Manny Pacquiao is also set to release his own cryptocurrency on GCOX, while former welterweight boxing king Floyd Mayweather is also among the list of celebrities endorsing initial coin offerings, according to reports. gcox.com like to borrow an average amount of £91,000 each over the next six to 12 months, almost a half (47 percent) want to use that money to hire new staff and a third (33 percent) wish to plough it into their working capital. Interestingly, 28 percent of SMEs plan to make acquisitions with the help of the money they borrow. The dismal picture painted by the CYBG survey is contrasted by some good news in the latest UK Manufacturing Purchasing Managers’ Index (PMI) that showed solid growth for March 2018 at 55.1, up from 55.0 in February. Output continues to grow and cost pressures have eased, all spelling good news for UK manufacturers. New orders and employment, however, both up in previous months, are growing at a slower pace. Manufacturers in the UK are seeing a steady flow of new business, both domestically and internationally. With new export orders up for nearly two years in a row, export business is thriving; with manufacturing firms putting success in this area down to Sterling weakness, greater marketing and awareness, and repeat business. cybusinessonline.co.uk >NEWS IN BRIEF CICM gears up GDPR GDPR implementation is full steam ahead at CICM HQ. The Institute’s Privacy Notice, available to view at cicm.com, has been revised providing members with information on how, when and why it will be collecting data with the assurance that personal data is in safe hands. Sue Kettle, CICM Head of Member Engagement, says members will shortly receive information on the CICM’s new member communication preferences service: “This will provide the opportunity to choose what information is received and by what means; it’s no longer all or nothing,” she explains. “Members can change their preferences now by logging in to the website with their membership number and password and visiting the ‘My Mailings’ section in the Members Area.” The entire HQ team is also undergoing training using the newly-launched CICM Knowledge Hub. “The module on GDPR is challenging but provides clear guidance on compliance within the business,” Sue continues. “Members have the benefit of being able to access this and a host of other e-learning and other resources through CICM Knowledge Hub.” See article on page 48 to learn more. NEW export chief A former Barclays corporate banking executive has been appointed as Britain’s export chief by Liam Fox’s Department for International Trade. John Mahon will hold the new position of Director General for Exports. He will report to Antonia Romeo, the permanent secretary, and will be responsible for devising an exports strategy ahead of trade negotiations. gov.uk/government/organisations/ department-for-international-trade Natwest launches new fraud protection system NATWEST has strengthened its fraud protection systems with the adoption of ‘Corporate Fraud Insights’ – a solution said to detect and prevent invoice redirection fraud – where businesses are scammed into paying money into a fraudster’s account rather than to their intended supplier. Vocalink Analytics and NatWest worked together to develop, test and launch Corporate Fraud Insights. Following its introduction last year, the solution has prevented losses of over £7 million to customers, with individual attacks often worth hundreds of thousands of pounds. Gary Kearns, Executive Vice President for Vocalink Analytics, says it applies sophisticated analytical techniques to vast amounts of payments data to build models which identify suspicious activity: “Every time a business pays an invoice, a behavioural signature is left behind. By analysing these signatures, and the signatures of historical frauds, we are able to identify and flag suspected incidents of fraud.” NatWest has also rolled out a new app to help businesses digitally manage company spending. ClearSpend is a free mobile app for NatWest Commercial Card customers enabling businesses real-time visibility and control of their company card spending. Following the trial of over 100 customers last year, ClearSpend now links directly to the card processor, which enables users to see transactions as they happen including real-time balance and credit limit information. There is also improved functionality for the customer to manage their account, including setting credit limits and merchant category blocking. business.natwest.com Gary Kearns, Executive Vice President for Vocalink Analytics The Recognised Standard / www.cicm.com / May 2018 / PAGE 7
Page 1 and 2: CREDIT MANAGEMENT CM MAY 2018 £12.
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Page 11 and 12: Manufacturers express concern over
Page 13 and 14: NEWS FOCUS BILL OF RIGHTS Why with
Page 15 and 16: MAKE YOUR CASE There are also some
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Page 19 and 20: CORPORATE SOCIAL RESPONSIBILITY Ric
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Page 23 and 24: CORPORATE SOCIAL RESPONSIBILITY CAS
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Page 27 and 28: Their location within the Universit
Page 29 and 30: TRADE TALK A landmark moment The si
Page 31 and 32: CURRENCY UK EXCHANGE RATES VISIT CU
Page 33 and 34: COUNTRY FOCUS AUTHOR - Adam Bernste
Page 35 and 36: LEGAL MATTERS AUTHOR - Peter Walker
Page 37 and 38: In uncertain times... it’sgood to
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Page 41 and 42: ADVERTORIAL Going under cover James
Page 43 and 44: OPINION AUTHOR - Chris Sanders FCIC
Page 45 and 46: CICM EDUCATION CONFERENCE 2018 Tues
Page 47 and 48: APPRENTICESHIPS A unique opportunit
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Page 51 and 52: CAREER’S ADVICE Handing in your r
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FORTHCOMING EVENTS Full list of eve
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BRANCH NEWS A winning night West Mi
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CREDIT CONTROLLER SUCCESS THROUGH E
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Cr£ditWho? CICM Directory of Servi
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CM magazine May 2018

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