CM December 2023

NEWS ROUNDUP
Concerns mount over Buy Now Pay
Later as its use mushrooms
MORE than a quarter
(27 percent)
of UK adults
(approximately 14
million) have used
Buy Now Pay Later
at least once in the six months prior
to January 2023. This is up from 17
percent who said they had used it in
the preceding 12 months in May 2022,
raising serious concerns within the
debt advice community
Research from the Financial
Conduct Authority (FCA) also found
that frequent users of BNPL are more
likely to be in financial difficulty. They
were over twice as likely as those who
have not used BNPL to also have a
high-cost credit product, almost twice
as likely to have increased the amount
of debt on credit products over the
last year, and over four times as likely
to have missed a payment of a bill or
credit commitment in three of the
last six months.
Sheldon Mills, Executive Director
of Consumers and Competition at the
FCA, says that while the FCA does
not have regulatory oversight over
BNPL products, it is determined to
protect consumers using financial
services where it can: “Our research
shows a significant increase in the
use of BNPL over the past year. When
used appropriately, the product
provides valuable benefits,
but we want to ensure that
consumers, particularly those
in vulnerable circumstances,
have adequate protections
and are given sufficient
information.'
Richard Lane,
Director of External
Affairs at StepChange
Debt Charity, says the
figures are alarming
but no surprise:
“Given the immense financial strain
so many people have been under for
the past two years, it’s no surprise
to see the use of BNPL on the rise.
While we know that these products
work well for millions of consumers,
for those who are struggling to make
ends meet it is an unregulated line of
credit which can all too easily result in
people borrowing to pay bills or make
other repayments.
“It’s encouraging to see that
the FCA has secured changes
to potentially unfair and
unclear BNPL contract terms,
as we have long-held concerns
that current policies vary
significantly between
providers. However,
only proportionate
regulation will improve
RICHARD LANE
– StepChange.
Sparks fly for Utility providers
over poor customer service
DESPITE best efforts by
utility providers, 25
percent of people report to
be receiving more than 10
incorrect utility bills when
moving home. This is
causing a knock-on effect in the industry
as one in five customers would consider
leaving their utility provider if they were
billed incorrectly, and more than one in 10
people have already pulled the trigger and
left their supplier due to being chased for
an incorrect bill or debt that didn’t belong
to them.
The matter of misplaced debt is often
out of the hands of utility providers, as
almost one in five people don’t update
their supplier at all when they move
home, either because they don’t know
how to, or they wrongly think the council,
or their supplier does it for them. Of those
that do know how to inform their supplier
of their new details or have tried to notify
their supplier of an incorrect bill arriving
at their address, 20 percent said they
would rather switch provider than try to
fix the issue with their existing one.
The study, conducted by credit
reference agency, Equifax, found that 27
percent of customers making the switch
felt that suppliers who chased for or sent
incorrect bills, were incompetent with
their data, while 17 percent were ignored
when they tried to inform their supplier
of an issue with their bill.
The issue of misplaced debt and
incorrect occupant identification, fueled
by a growing generation of renters and
frequent movers, is continuing to grow.
To support utility companies, Equifax has
partnered with Sagacity to offer Occupier
ID. With the help of Equifax data, Occupier
ID improves data quality and converts
unknown and void properties into
genuine customers. This in turn improves
billing accuracy, reduces returned
mail and eliminates the need for mail
addressed to 'The Occupier'.
Incorrect occupant data is causing
utility providers to lose out on customers,
and potential revenue, but also has an
impact on customers – 30 percent of
occupants admit to feeling stressed due
to being wrongly chased for a utility
bill. In January 2023 alone, over 270,000
people moved home, and a further
308,000 planned to, meaning there could
be over half a million incorrect bills sent
Brave | Curious | Resilient / www.cicm.com / December 2023 / PAGE 8