CM December 2023

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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
NEWS ROUNDUP “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.’’ >NEWS IN BRIEF these products for millions of customers, which is why we’ve been disappointed to see delays to the implementation of new rules that have been promised since 2019. We urge the Government to stick to its guns and bring about this regulation as soon as possible. Putting struggling consumers first is the right thing to do.” Sarah Coles, Head of Personal Finance, Hargreaves Lansdown, is concerned that very regular users run a risk that it could take a stranglehold on their finances, squeezing the life out of their financial resilience: “On paper, the fact there’s no interest to pay on money borrowed this way makes it a very sensible option to help us manage our budgets. There’s no doubt that millions of people are taking advantage of BNPL in a way that works for them. However, for others it becomes a dangerous habit – encouraging them to buy things they don’t really need and can’t afford. “As a result, those who lean heavily on BNPL are far more likely to stray into other worrying types of borrowing – from taking out high-cost credit to letting debts mount up, and missing repayments.” The FCA has used its powers under the Consumer Rights Act 2015 to help bring changes to potentially unfair and unclear contract terms, addressing thorny issues like continuous payment authority terms easier and your cancellation rights. Open all hours ONE in five Brits are now making regular payments via Open Banking (21 percent) according to research carried out by Moneyhub. Open Banking payments allow users to make a payment directly through their phone’s banking app or online banking account to another account, which can be a quicker and more cost-effective alternative to other payment options such as card payments, standing orders or direct debits. Open Banking payments hit a milestone earlier this year, hitting 11.8m transactions in September, with the number of active payment users surging by 68 percent in July 2023 compared to the same month the previous year. CICMQ RE-ACCREDITATION 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. by utility companies this year. Craig Tebbutt, Chief Strategy and Innovation Officer, at Equifax UK says that misplaced debt is not only causing financial issues for suppliers but also an undue amount of stress for customers: “Occupier identification is a very real issue when it comes to misplaced debt and potentially damaged credit. It is for this reason that Equifax are proud to partner with Sagacity to offer businesses the benefit of Occupier ID.” Team receive a hat-trick award The Hays Specialist Recruitment Team welcomed CICM Head of Accreditation, Karen Tuffs FCICM(Grad) to their UK Finance Share Service Centre in New Malden, Surrey on 20 October to receive their third CICMQ Best Practice Award. Head of Credit, Jamie Ditch and Credit Manager, Mark Phillips MCICM were joined by Paul Schofield, FSSC Director, Andy Davis, Client Liaison Manager, Harpreet Sandhu-McDonough, Talent & Development Director and members of their award winning credit control team to celebrate the team’s successful re-accreditation. First accredited in 2016, and renewing in 2018, the team, lead by Jamie and Mark worked diligently through the refreshed programme to secure re-accreditation in June 2023, achieving a “Good” pass. Many congratulations to Hays Specialist Recruitment! Brave | Curious | Resilient / www.cicm.com / December 2023 / PAGE 9
Page 1 and 2: CREDIT MANAGEMENT CM DECEMBER 2023
Page 3 and 4: SEAN FEAST FCICM MANAGING EDITOR Ed
Page 5 and 6: 28 THE SCORES ARE IN CICM GOVERNANC
Page 7: NEWS ROUNDUP Seven million adults f
Page 11 and 12: Screen your clients against 1,100 w
Page 13 and 14: Whatever the next 12 months has in
Page 15: “We are proud to be the first BNP
Page 18 and 19: Thursday 1st February 2024 Royal La
Page 20 and 21: INFORMATION SECURITY Held to ransom
Page 22 and 23: INFORMATION SECURITY AUTHOR - Andre
Page 24 and 25: ECO WARRIOR Invoice Finance can sup
Page 26 and 27: CONSUMER CREDIT SCHOOL’S OUT Coll
Page 28 and 29: CONSUMER CREDIT The scores are in A
Page 30 and 31: CONSUMER CREDIT AUTHOR - Emma Steel
Page 32 and 33: Towering above the competition At W
Page 34 and 35: COUNTRY FOCUS South Korea is a dest
Page 36 and 37: COUNTRY FOCUS AUTHOR - Adam Bernste
Page 38 and 39: International Trade Monthly round-u
Page 40 and 41: INSOLVENCY Downward Spiral Are the
Page 42 and 43: CICM TRAINING Training courses that
Page 44 and 45: Introducing our CORPORATE PARTNERS
Page 46 and 47: Introducing our CORPORATE PARTNERS
Page 48 and 49: STATISTICS Data supplied by the Cre
Page 50 and 51: LOOKING FOR YOUR NEXT CAREER MOVE?
Page 52 and 53: HR MATTERS Love action Blowing the
Page 54 and 55: NEW AND UPGRADED MEMBERS Do you kno
Page 56 and 57: Cr£ditWho? CICM Directory of Servi
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Cr£ditWho? CICM Directory of Servi
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Brave | Curious | Resilient / www.c
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CM December 2023

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