DEMSA bulletin: Consumer Duty / CCA reform / Insolvency Stats / Events

In today’s bulletin

  • General update
  • Reforming the Consumer Credit Act
  • Insolvency stats – November 2022
  • FCA quarterly consultation paper 38 – covering Consumer Duty
  • Events

General update

There was a nice post from the CSA around Matt Subert’s funeral on 14 December 2022 featuring a special photo of Matt and Peter Wallwork. As Peter reflected, his family and friends gave Matt a really good send-off with some great eulogies and conversation afterwards, recounting all kinds of memories and stories of good times. I’ve had a few situations at previous CCTA dinners under Greg’s stewardship where you would avoid standing next to Matt for photos because of the height discrepancy, which Denise wonderfully described in her emotional speech at the Credit Strategy awards on 30 November 2022.   

The expected rise in interest rates

Along with the Bank of England, the FCA has published the 2022 Q3 Mortgage Lending Statistics data for regulated firms carrying out mortgage lending and mortgage administration. These show that the outstanding value of all residential mortgage loans was £1,667.1 billion at the end of 2022 Q3, 4.1% higher than a year earlier. UK Finance published their housing and market forecasts for 2023 and 2024. In the face of the ongoing cost-of-living squeeze and rising interest rates, they expect a softer market for house purchases.

As reported earlier in December, the FCA regulatory round-up confirms that they are consulting on draft mortgage guidance setting out the support firms can offer borrowers affected by the rising cost of living.

StepChange Debt Charity has reacted to the 0.5% interest rate rise this week, referencing the 4m mortgage holders already identified by the Bank of England as facing higher mortgage costs in 2023. The mortgage support proposed by the Financial Conduct Authority is highly topical. The graph below shows a 23% increase in early arrears, but have said that this needs to be taken in context, as the current figure is near to its historic low and the anticipated increase would still see numbers some 7% below the average over the past decade coming out of the last recession.

StepChange is already seeing a slight rise in the proportion of clients who are home-owners, and this is likely to continue in 2023. Tenants currently form the bulk of their clients, and they too will be vulnerable to higher rents, as landlords seek to recoup their own higher debt servicing costs. The commercial  debt advice sector would typically see a slightly higher percentage of mortgage holders in their DMP books. Available forbearance measures will be a vital tool for debt advisers.

The Bank of England has confirmed that household finances are being stretched by increased living costs and rising mortgage payments. Households are adjusting spending behaviour as real income is squeezed, although widespread signs of financial difficulty among UK households with debt have yet to emerge. The risk that indebted households default on loans, or sharply reduce their spending, has increased.

The guidance sets out the flexibility firms have to support customers who have missed monthly mortgage payments or are worried they may not be able to make payments in future. It covers options such as extending the term of their mortgage, switching to interest-only for a temporary period, moving to a different interest rate or making reduced monthly payments for a temporary period.

They also published new information for borrowers affected by rising prices.





Loan fraud

The FCA has warned of the increasing risk of loan fee fraud this Christmas, with cases already up by a fifth on last year. Their loan fee fraud campaign is running to help increase awareness and educate consumers on loan fee fraud and encourage consumers to check if a loan provider is authorised before taking out a loan. This is especially prevalent during the cost-of-living crisis and with the festive period fast approaching. Debt advisers may see examples of this in the New Year when demand for debt advice begins to rise.

Jane Eckford joins the Advisory Board of the Vulnerability Registration Service (VRS)

I would like to add my welcome Jane to the Advisory Board of the Vulnerability Registration Service (VRS). We next meet in the New Year.

Jane is known for improving local authority responsiveness to financial and social vulnerability in the communities they serve. Amongst many other achievements, she is a NED for the Society of Local Authority Chief Executives (SOLACE), and for Age Concern Liverpool & Sefton. She has a personal interest in the impact of digitally informed decision making on the most vulnerable, supporting Open Data Manchester in the development of its Declaration for Ethical Data Use.


Second vulnerability report from VRS

I have posted on LinkedIn (530 impressions so far) after the VRS webinar on 13 December and the publication of their Vulnerable Customer Exclusion report. The report can be downloaded from the link.

The VRS webinar was really well attended on 13 December 2022, with some great presentations with considerable lived experience. I have followed up with Mike ( and Ben ( at Plain Numbers around further key messaging around getting our communications right as part of Consumer Duty implementation planning which builds on the good work of Amplified Global and StepChange in their Mixed Messages report around communications that are fit for your target audience and the importance of intelligibility in contact strategies. These services seem to be gaining some traction in the debt advice sector.   

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Money Advice Hub – ‘Debtember’ campaign

It was good to catch up with Sam Nurse, CEO of Money Advice Hub, this week after spotting a number of her posts (PIP above) around benefit entitlements and her #Debtember campaign, which is very topical after the MaPS deficit budget closed and income optimisation has been a recurring theme from many on the circulation.

Sam has produced a ’10 Golden Rules’ guide for claiming Discretionary Housing Payment (DHP) to help with housing cost shortfalls for renters struggling. As reflected in the chat from the MaPS event this week, there was considerable comment around the scope of the role of debt advisers and Sam has reflected this in one of her posts around income optimisation.   

Update on MaPS Future Debt Advice Commissioning Strategy – 15/12/2022

I attended the MaPS webinar on 15 December 2022 with Anna Hall, Fiona Hague and Christy McAleese around debt advice commissioning and the promotion of the survey below. This included debt advisers that are MaPS funded and those that aren’t.

Webinar recording: (slides also available)

Some healthy discussion in the chat around the recent commissioning, wait times for debt advice sessions at a regional level and adviser wellbeing. A number of you have responded to a MaPS LinkedIn post this week. They are undertaking an evidence gathering phase to support the development of a future commissioning strategy. This includes working with independent external research agencies on 3 research projects:

  1. Debt advice clients and landscape post-pandemic (Research agency: Revealing Reality)
  2. The motivations and behaviours of those needing but not seeking debt advice (Research agency: Cognition Company)
  3. The funding and operating models of debt advice (Research agency: The 4OC)

They are looking for frontline debt advisers, service managers and organisations supporting the advice sector who are willing to participate in the research. This could be by completing online surveys, telephone interviews or hosting a site visit.

If anyone is interested in supporting the research then please complete the survey below by midday on Friday 23 December 2022.


Meanwhile WADA has responded to grant cuts for community debt advice.


The Advice UK response to The Insolvency Service personal insolvency reform can be found at the link below. They believe that significant changes are needed in the area of personal insolvency and that the sector should be regulated by the FCA.


Correction from last week’s bulletin

I am pleased that I have Colin Trend on the bulletin circulation as he tends to correct me if I have got some of my benefit statements wrong, as in the case of last week when covering mortgage support. He also reads the sports updates and adult children sections (notably car related).

I mentioned under the General Update last week:

“If someone is in receipt of, or qualify for, Universal Credit (or other income benefits), they can apply for a Support for Mortgage Interest (SMI) loan. This means that a lender can switch their mortgage to interest-only and SMI will cover the interest payment. In the Autumn Statement, the government confirmed that the wait time for eligibility will be reduced from 39 weeks to 13 weeks. The zero earnings rule will also be removed, meaning that those with some income will not be penalised.“

Correction – it should say:

“If someone is in receipt of, or qualify for, Universal Credit (or other income means-tested benefits), they can apply for a Support for Mortgage Interest (SMI) loan. This means that a lender can switch their mortgage to interest-only and SMI will cover the interest payment. In the Autumn Statement, the government confirmed that the wait time for eligibility will be reduced from 39 weeks to 13 weeks. The zero earnings rule will also be removed, meaning that those with some income will not be penalised.“

Compulsory body-worn cameras for bailiffs to protect vulnerable

My thanks to Russell Hamblin-Boone of CIVEA for bringing this vulnerability related story to my attention.


Vulnerable people struggling with debt should be better protected from rogue bailiffs under government plans to make body-worn cameras compulsory. This is important as the cost-of-living crisis worsens and indebted households with assets are targeted. Regulated firms subject to the FCA Consumer Duty need to maintain a clear record of their supply chain activities when initiating enforcement action against vulnerable customers.

These changes apply in England & Wales and follow the government backing to the Enforcement Conduct Board – a new independent oversight body that aims to hold the debt enforcement sector to account, drive up standards, and establish a clear set of guidelines for best practice.

The release makes clear that the majority of bailiffs/enforcement agents act professionally and already voluntarily wear body-worn cameras.

The ECB has been created with agreement between the enforcement industry and leading debt advice charities including Money Advice Trust, Christians Against Poverty and StepChange Debt Charity. It will have a special regard for those experiencing financial difficulty or other vulnerable circumstances. The ECB has just has announced that it has appointed Chris Nichols as their first CEO and he starts this role in March 2023.

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Utilita Energy paying out £830,000

Following the recent Ofgem assessment, Utilita Energy is paying out £830,000 following concerns around the provision of additional support credits for prepayment meters customers, who tend to be the most financially vulnerable. Overall, prepayment meters are currently relied on by around 4m UK households.

Over 25,000 customers were potentially affected, including those with medical issues and those classed as vulnerable. Utilita currently serves over 775,000 electricity and 648,000 gas customers.

Impacted customers could potentially receive £20 each, in most cases as a direct credit on their meter. £321,740 will also be paid into the Energy Redress Fund, which supports energy consumers in vulnerable situations, amongst other innovation and carbon emission reducing investments.


Caroline Thomas CMgr MCMI, Senior CX Service Designer at FourNet, has published an article around supporting vulnerable customers in the energy sector after Ofgem published further findings from their ‘deep dives’ in November 2022. The articles covers the ‘Principals for CX Design Engagements’. which includes inclusive design that is closely aligned with ISO 22458 (consumer vulnerability) and the BSI initiatives in the Energy, Financial Services and Water sectors.


Stop Loan Sharks activity over Christmas

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Cath Wohlers was in action on the VRS webinar this week, with both Cath and Trish continuing to get the message out across the sectors we represent. We will pick up on this again in the next webinar being chaired by Chris Warburton on 7 February 2023. I have copied Cath and Trish in the circulation. We welcome their support in the various events planned in the New Year.

The campaign is geared to protecting finances for the financially vulnerable either side of the festive period, where January can be a difficult month for many households. Stop Loans Sharks UK has published some useful advice on how to stay safe from loan sharks.

Cath has also promoted a recent Blog by Harry Hughes from LSB around identifying and supporting victims of illegal lending. Harry was on the same panel as me at the Credit Strategy event on 30 November. The use of various techniques including open banking is powerful in identifying both vulnerability and loan shark activity, where a surprisingly high number of loan shark operators use faster payments rather than cash.   



Registry Trust partial settlements campaign

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I think I may add ‘lobbyist’ to my job title along with iNED. DEMSA continues to support this campaign. Accurate data and the ability to re-habilitate (where feasible) an indebted consumer remain critical aspects of our role in the debt advice sector.


Digital transformation


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A topic close to my heart when acting as a Programme Manager/Delivery Lead and the challenges faced with balancing ‘the iron triangle’ as Ollie from the FourNet Customer Experience (CX) team describes. This highlights the time, cost and scope dilemma that will be inevitable in Consumer Duty type transformation that include a ‘digital first’ agenda and regulatory deadlines. An interesting teaser.

With the implementation planning window for the Financial Conduct Authority (FCA) Consumer Duty now well underway, I have been looking at ‘digital transformation’ under the Duty and some of the challenges of a ‘digital first’ approach. The regulator has highlighted in their non-handbook guidance (FG22/5) some of the risks that need to be mitigated where a digital first approach feels more like digital only with risks of customer exclusion and poor outcomes.   


Collaboration case studies – PayLink partners with Thames Water

By using Paylink’s Embark application, Thames Water customers will be able to provide a breakdown of their circumstances so that Thames can set up a sustainable payment plan based on their affordability. Customers will also be able to use open banking along with the ability to request a payment proposal for managing their water bills. This will enable Thames Water to support more customers and to better support customers in financial difficulty.

Nina White, Director of Financial Customer Care at Thames Water said:

“We’re always looking for ways to improve our customer service and we’re pleased to be working with Paylink to create a journey for customers that allows us to understand their needs and access our wide range of support, as smoothly as possible. This is really important to us at this time as the cost of living continues to rise and we need to make it as easy as possible for our customers to engage with us.” 

Thames Water offers a range of financial support schemes for its customers and currently supports over 300,000 households with discounted bills. Its WaterHelp scheme offers a 50% discount on customer’s bills if they are on a low income. 

The company has recently increased the income eligibility threshold for this scheme to £17,005 in the Thames Valley and £21,749 in London.


Reforming the Consumer Credit Act 1974 – Consultation issued

HM Treasury has published the consultation paper around the reform of the Consumer Credit Act (CCA). This follows the government announcement on 16 June 2022. Stakeholder responses are requested by 17 March 2023.

DEMSA welcomes a more modern, simpler and innovative regime that is couched in the right language for users of consumer credit in an omni-channel world. The recent Mixed Messages report from Amplified Global™ and StepChange Debt Charity highlighted the need to a revolution in communication as the Consumer Duty is implemented under the more agile regulatory framework of the FCA.

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A quick search has yielded limited references to ‘debt advice’, ‘debt counselling’ and ‘debt adjustment’. We also have personal insolvency reform consultation responses being reviewed by The Insolvency Service.

It is the government’s intention that this reform will facilitate innovation in the credit sector and increase accessibility of credit products. This is also an opportunity for the government to bolster existing consumer protections to ensure customers remain adequately protected in a modern and increasingly digital economy.

I am interested in debt adviser and creditor views on this, especially around the opportunity to influence simpler and more intelligible communications that address low levels of literacy and numeracy.


Insolvency statistics – November 2022

The number of England & Wales company insolvencies in November 2022 was 2,029, which is 21% higher than in November 2021 (1,676) and 35% higher than the number registered 3 years previously.

In Scotland, there were 118 company insolvencies, 13% higher than the number in November 2021 and 36% higher than in November 2019. This was comprised of 42 compulsory liquidations, 72 CVLs, three administrations and one CVA. There were no receivership appointments.

In Northern Ireland, there were 20 company insolvencies, this is more than double the number in November 2021, but 35% lower than November 2019. This was comprised of 16 CVLs, two compulsory liquidations and two CVAs. There were no administrations or receivership appointments.

Personal insolvency

As we have been focusing on IVA volume providers over the last few weeks, there were, on average, 7,801 IVAs registered per month in the 3-month period ending November 2022, which is 11% higher than the 3-month period ending November 2021, and 14% higher than the 3-month period ending November 2019. Volume provider percentages have ranged between 65% and 68% of all new IVAs.

By comparison, there were 2,269 DROs in November 2022, which was 10% higher than November 2021, but remains 4% lower than November 2019 despite the thresholds changing in June 2021. Bankruptcies in England & Wales remain very subdued with 546 registered, 16% lower than in November 2021 and 60% lower than November 2019.

There were 146 individual insolvencies in Northern Ireland, 24% lower than in November 2021 and 48% lower than November 2019. This consisted of 134 IVAs, 9 DROs and 3 bankruptcies.

Breathing space

There were 6,796 Breathing Space registrations in November 2022, which is 40% higher than the number registered in November 2021. 6,689 were Standard breathing space registrations, which is 40% higher than in November 2021, and 107 were Mental Health breathing space registrations, which is 19% higher than the number in November 2021. We now seem to have a consistently upward trend and November 2022 looks like the highest registration figure.


CP22-26 – FCA quarterly consultation paper 38 – covering Consumer Duty

The FCA has issued its December regulation round-up and there are a couple of items we haven’t previously covered. The round-up covers the same Debt Packager update from earlier in December. The S165 requests will have been issued to Principals with Appointed Representatives (ARs).

Victoria will be interested in the new ‘pensions dashboard’ update, which will make it easier for savers to understand their pension savings. The FCA has reflected that this is an important development. The FCA recently confirmed their rules for pension providers to support the dashboards, and published their consultation on the framework for those looking to provide the dashboards themselves.

The FCA is consulting in the December 2022 Quarterly Consultation Paper (QCP) on changes to make certain points clearer in the rules. This follows discussions with firms since publishing the final Consumer Duty rules in July 2022, where they have identified a few areas where clarification is needed on how the Duty applies. The clarifications are in Chapter 8 of the QCP. For updated information on the Consumer Duty, visit the firm information page on the FCA website. Resources include their sector-based webinars which are available on demand alongside their transcripts.

I have had a quick review of CP22-26, but can’t see that any of the proposed Consumer Duty changes would have a material impact on the core sectors that I cover.



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The Aveni CRO survey results and webinar replay from 15 December 2022 are available from the link below.

The FCA emphasis on the importance of recording customer calls and analysing them is reflected in the latest Aveni round-up.



IE Hub newsletter

Some great collaboration stories in this edition covering local CABs and Money Advice Scotland.

Sharing of I & Es will become increasingly strategic in 2023 as we see more and more consumers with multiple debts to multiple creditors. The ‘tell us once’ approach is a key foundation in the Consumer Duty and FCA expectations. This is particularly important with priority creditors.


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