Credit Management October 2022

NEWS ROUNDUP
Law firm claims Bounce Back Loan
fraud reveals ‘real inadequacies’ in
Banking processes
ONLY 15 percent of The Bounce Bank
Loan Scheme (BBLS) fraud has
been investigated by the National
Investigation Service in the past
two years, and ‘real inadequacies’ in
Banking processes and controls have left the
country with little chance of recovering lost
money.
The Bounce Bank Loan Scheme, common
to other COVID related support schemes, was
heavily targeted by fraudsters. It was argued
by the previous Government that it was better
to issue funds to businesses through the BBLS
than to subject applicants to more stringent
fraud checks.
Data released by the Department of
Business, Energy & Industrial Strategy has
confirmed that The National Investigation
Service has, in the two years since September
2020, only opened investigations into £160m in
BBLS fraud, whilst £1.1bn in BBLS is suspected
to be fraudulent.
Sam Tate, White Collar Crime Partner at RPC,
the international law firm says that he expects
this figure of £1.1bn in reported BBLS fraud to
increase over time.
Under BBLS £46.6bn was distributed to 1.6m
recipients. While there is some variation across
financial institutions as to the proportion of
defaulted loans comprising suspected fraud,
again, these figures are expected to rise as
internal investigations continue.
While lenders have reported preventing over
£2.2bn of fraudulent applications, it remains
unclear as to the total amount of fraudulent
funds being successfully recovered.
“What this shows is not only the huge
ONS data shows parents twice as likely to have
borrowed more and to be behind on bills
THE Office for National Statistics
(ONS) has published an article on
parenting and spending that shows
parents are bearing the brunt of the
cost-of-living crisis.
Sarah Coles, senior personal finance
analyst, Hargreaves Lansdown, says
that around two in five parents are
spending less on groceries, and two
thirds are cutting back on nonessentials:
“Despite this, they’re twice
as likely to have run up more debts to
cover rising costs, and twice as likely
amount of fraud perpetrated during lockdown
but also real inadequacies in systems and
controls at many banks, as previously
identified in FCA enforcement activity,” Sam
says.
“Where the banks seem to have fallen down
is in not adapting and implementing antimoney
laundering and fraud checks quickly
enough. Now we are left with a mess and there
is little chance of recovering lost money.
“Next time the Government needs to be
quicker to use all of the resources, including
those of the private sector to stop and pursue
this fraud at the earliest point.”
Sam claims that the more egregious
and coordinated the fraud, the lesser
likelihood of recovery, as many of the
fraudsters reside abroad and are members
of online criminal gangs: “To really tackle
the industrial scale of fraud we now
see, we need a coordinated approach,”
he continues. “This must include
authorities in financial centres such as
Dubai around e-payments and the
increasing the use of crypto to hide
ownership.
“It is also of deep concern that the
replacement to Action Fraud, which
the Government has deemed is not fit for
purpose, is not being put in place until some
point during 2024. As Rob Jones, the Director
of the NECC (National Economic Crime
Council) said recently in relation to fraud, the
current response is ‘just not good enough.’ It
remains to be seen if sufficient funding will be
put in place to deal with fraud. If not, we will
continue to see exponential growth.”
to be behind on their energy bills,” she
says.
The HL Savings & Resilience
Barometer, produced with Oxford
Economics, found last month that
when compared to non-parents at the
same income level, parents are less
resilient in almost every area. Those
on average incomes are roughly half
as likely to have enough cash left over
at the end of the month (25 percent vs
52 percent) or enough in savings (38
percent v 71 percent).
The Barometer also found that
parents face an incredibly difficult
12 months ahead. For the average
earner, the proportion with enough in
savings will plummet from 64 percent
to 28 percent and those with enough
cash left at the end of the month
will drop from 25 percent to just one
percent. For parents on the lowest
incomes the position looks incredibly
worrying, because none of them will
have enough surplus cash, and just 13
percent will have enough in savings.
PERCENTAGE OF
PAYMENTS TO BALANCE
NEWS ROUNDUP
CICM to Develop and Teach
HCEOA Accreditations
THE High Court Enforcement Officers
Association (HCEOA) is making it
easier for aspiring enforcement
officers to learn on the job whilst
receiving an Ofqual regulated
qualification.
As part of a new deal with the
HCEOA, the CICM will assess and
revamp the Level 4 diploma and
all learning materials utilised, as
well as creating a new certificate
for the practical experience
required to become a High
Court Enforcement Officer.
As part of the new
programme, the HCEOA
is seeking to attract a raft
of new candidates, many
of who, it is hoped, will
be younger applicants
looking to make the move
to the industry or widen
their existing skillsets. One
sector the HCEOA is keen to
penetrate is the existing pool
of lawyers working within
the credit industry and often
working side-by-side with
debt collection agencies and
HCEO’s.
Chris Badger, HCEOA board
member and Chair of the
HCEOA Education Committee,
said: “Thanks to the
partnership we can now
ensure all our learners
THIS is currently at an all-time high with
over 40 percent of the balance being paid
each month and has risen by 10 percent
since just 2021, again because many
consumers have more savings they
can tap into. This percentage has been
increasing steadily over the past few
years but back when the financial crisis
hit, around 25 percent of the balance was
being paid each month.
Over the next few months, it is
expected that this percentage will drop,
and this will affect average credit card
balances. Will the practices necessary to
manage persistent indebtedness cause
a false impression if more customers are
forced towards minimum payments and
are therefore moved out of cards to other
products, or migrate to using ‘Buy Now
Pay Later’?
are getting the best learning materials
available as well as regulating the
practical experience as part of their
journey to becoming High Court
Enforcement Officers.
“In addition, we now have the
opportunity to recruit new officers
outside of our existing pool of talent,
to encourage a new generation
of HCEOs to join the profession
and encourage others already
working in credit to widen
their skills.”
As well as welcome
new students, the CICM
along with the HCEOA
will migrate all existing
students studying with
the HCEOA onto the
new programme once
complete to ensure a smooth
transition and no loss of time
or opportunity.
❝
“Thanks to the partnership we can
now ensure all our learners are
getting the best learning materials
available.’’
❝
AVERAGE SPEND
BEFORE the financial crisis of 2008-2009,
average spend had been rising with the
same increasing trend seen before the
pandemic hit. During 2008-2009 and in
the first year of the pandemic, spend
dropped with a higher decrease during
the pandemic because of the lockdowns.
Increased savings and the relaxation
of restrictions resulted in a steep
increase in spend between 2021-2022
but if we look back to 2009, this uptick
in spend was also seen and continued
up until 2012. At this point, regulations
were being implemented giving the
consumer more ‘rights’ and improved
customer control. This impacted credit
card limits as issuers were not allowed
to automatically increase a customer’s
credit limit but had to offer the increase,
and greater emphasis was placed on
whether the customer could afford this
increase to their limit.
> CICMQ
NEWS
Wesco Anixter’s
successful assessment
THE Wesco Anixter credit team
met in person for the first time in
two years for their annual credit
meeting at their Sheffield offices in
August. CICM Head of Accreditation,
Karen Tuffs FCICM(Grad) joined Lisa
Humphries MCICM, Regional Credit
Manager and the team to present
Wesco Anixter’s third CICMQ reaccreditation
having first securing
the credit and collections industry’s
flagship best practice award in 2014.
Wesco Anixter’s successful
assessment was completed in
December 2021 against the backdrop
of the pandemic and preparations
for the Wesco Anixter merger,
completed in June 2022. Colleagues
from Sheffield, Manchester,
Bracknell and Dublin enjoyed an
action packed three days, working
on their credit roadmap, receiving
their CICMQ award and finishing
with Jules Eames, FCICM(Grad)
PGCE, CICMs Resource and Content
Manager, delivering the CICM's Credit
Bootcamp training. Lisa and the team
are clearly busy working on honing
their best practice skills even further
to go for a prestigious fifth award.
Huge congratulations to Wesco
Anixter
CICMQ award
presentation
CICM’s Head of Accreditation,
Karen Tuffs FCICM(Grad) met the
Edrington-Beam Suntory UK team
in a unique location for their CICMQ
award presentation...in a bar!
Anne Marie Valentini MCICM,
Credit Manager, Neville Ross,
Supply Chain and Finance Director,
Laura Dickson, Financial Accounts
Manager and members of the
Finance, Supply Chain and Marketing
teams gathered in the UK’s premier
supplier of whiskies in their office in
central Glasgow.
Edrington secured its first CICMQ
accreditation in March 2021 following
Anne Marie’s arrival in 2018 when
she set her sights on developing the
team’s best practice in all things
credit. The celebration held in the
on-site bar (coffee refreshment only,
it was 11.00am!) gave the team the
official acknowledgement of the
success they worked hard to earn.
Sincere congratulations to Anne
Marie and the team.
Brave | Curious | Resilient / www.cicm.com / October 2022 / PAGE 6 Brave | Curious | Resilient / www.cicm.com / October 2022 / PAGE 7