DEMSA Saturday update: Intelligibility / Volume Provider stats / SFS / Consumer Duty / Principal/AR regime / Events

General update

DEMSA will submit its MaPS call for evidence submission on deficit budgets on Monday after being granted a short extension. This will reflect the latest update from Citizens Advice.

Citizens Advice is running a cost-of-living briefing on 15 December 2022.


Bank of England Money & Credit

With regard to the comments above on house prices, the Bank of England reported that net borrowing of mortgage debt by individuals decreased from £5.9 billion to £4.0 billion in October 2022, the lowest level since November 2021 (£3.8 billion). Gross lending increased to £28.2 billion in October from £27.2 billion in September, while gross repayments went up from £21.5 billion to £24.8 billion.

Approvals for house purchases, an indicator of future borrowing, decreased to 59,000 in October, from 66,000 in September, and were below the previous 6-month average (also 66,000). Approvals for remortgaging (which only capture remortgaging with a different lender) increased slightly in October, to 51,300 from 49,500 in September, and were higher than the previous 6-month average of 47,300.

Individuals borrowed an additional £0.8 billion in consumer credit in October, following £0.6 billion of borrowing in September. This was below previous 6-month average of £1.3 billion. The additional consumer credit borrowing in October was split between £0.4 billion on credit cards, which increased from £0.1 billion in September, and £0.4 billion through other forms of consumer credit (such as car dealership finance and personal loans).

The annual growth rate for all consumer credit decreased slightly to 7.0% in October, from 7.1% in September. The annual growth rate of credit card borrowing decreased from 12.1% in September to 11.5% in October, while the annual growth rate of other forms of consumer credit remained at 5.1% from September to October.


HM Revenue and Customs (HMRC) has closed most of its phone lines due to a fault as many people seek advice ahead of filing their tax returns

I am pleased that I am not still on the Contact Engagement Programme at HMRC after the headline above.


Memorandum of Understanding (MoU) between the LSB and FCA published

The Lending Standards Board (LSB) have a mutual regulatory interest with the FCA in areas relating to lending to personal and business customers, access to banking, and protecting customers from Authorised Push Payment (APP) scams.

The approach set out in the MoU will:

  • seek to ensure that their organisations have a consistent understanding of expectations in relation to the application of the LSB’s Standards and Codes and relevant FCA regulation
  • set out how they can work collaboratively to prevent duplication of supervisory work
  • allow for due consideration to be given to FCA rules and guidance and LSB Standards and Codes when they undertake their respective policy development

It was great speaking with Harry Hughes (LSB) and Paul Lamont (Experian) at the Credit Strategy Collections & Vulnerability Summit around ‘the customer service conundrum’. LSB has been very active through November and DEMSA has presented at a number of events with Harry or Anna Roughley.   

I had just managed to get to the event after a 4-hour road trip from Lincoln along with the usual tyre and other warnings on my borrowed wife’s car (which also had no diesel in it at the start of journey).



Internet of Things (IoT) cybersecurity incident

UK Finance has published a blog around the Internet of Things (IoT). They have reflected that the potential ‘attack surface’ has becomes ever more prominent in society, both in our personal and professional lives. Although these devices might mainly be considered consumer goods, many businesses are relying on them to ease workloads and help with their supply chains. This can include using energy-efficient smart thermostats and lights in the office or warehouses. Employee-owned IoT devices (i.e. BYOD) may also connect to an organisation’s network, whether remotely or during on-site work, expanding the attack surface of the business piece by piece. Regulators have reinforced key messages around hybrid working and regularly revisiting BYOD policies and remote working policies.

The stats quoted are incredible, where IoT will continue to change our lives over the coming years, with the number of connected devices expected to grow from 13.8 billion units in 2021 to 30.9 billion by 2025, with an average of almost four IoT devices per person.

study by the Ponemon Institute found that 60% of firms do not monitor third-party-developed devices for cyber risk.

Worth a read and aligning to your own risk management framework and vulnerability assessments, notably around cybersecurity risk by developing a robust third-party risk management program. The FCA Consumer Duty and operational resilience focus will increasingly require evidence that the whole distribution/supply chain has been considered from a consumer journey perspective, which includes building trust and protect around scams and fraud.   

See also  DEMSA update: SDRP consultation / Breathing Space / FCA updates / Data Protection Reform / Event



The UK is in a Cost-of-Living Crisis – How Open Banking can help

Having sat next to Andrew Bonsall, co-founder and COO of challenger CRA AperiData, at the Credit-Connect awards dinner, I was interested in their recent post on LinkedIn around the cost-of-living crisis. Many of the stats will be familiar and relevant to the debate around the Standard Financial Statement (SFS) and making it fit-for-purpose through the next 2 years.   

AperiData has reinforced that Open Banking data is a powerful additional lens into a customer’s financial health.  It can show, for example:

  • If and by how much different spend categories have increased (e.g., utilities, mortgage payments, rent payments, other loan payments)
  • When new loans have been opened
  • When monthly income has changed
  • How much ‘wiggle room’ do customers currently have, and how will this change if certain spend types increase further?

We have a few challenger CRAs on the circulation and we will be exploring the wider impact of the FCA Credit Information Market Study in due course leading up to February 2023. The wider use of data contributors and third-party data, including open banking data, is a key topic both in terms of affordability assessments now, but also in terms of rehabilitating consumers in the future. Lex Jones has been promoting the Registry Trust initiatives at the All-Party Parliamentary Group (APPG) on Debt and Personal Finance earlier this week, ‘A fresh start? Improving access to personal debt relief’. According to the RTL post, there were a broad range of interests in the room, but with common cause in many respects, including the belief that the current systems are cumbersome and unhelpful to use from all perspectives. As reflected in their SDRP response, they believe that quality, timely, more complete debt data benefits everyone. They have been promoting their Partial Settlements and Claimant Data (i.e. identification of the claimant on a CCJ) initiatives. I met up with Lex at the RTL offices last Monday.   



Link: – DEMSA supports this initiative, especially in terms of improving outcomes through the course of a debt solution

General insurance pricing attestation following FCA multi-firm review

Chris Warburton and I have been recording some cross-sector Consumer Duty training this week and this FCA release is timely.

The FCA has set out their findings from the multi-firm review assessing how firms satisfied themselves that they do not systematically discriminate against motor and home insurance customers based on the number of years they have held their policy, including any renewal (tenure). This is probably a reflection of the ‘Fair Value’ reviews that some sectors may need to undertake, including the debt management sector. It is evident that the FCA is issuing data requests, though initial focus seems to be in the not-for-profit sector as part of the wider CONC 8 review.

One of the rationales for the new pricing rules in general insurance was to protect consumers by ensuring that they are placed in a position where they can understand the long-term cost of their product. This is clearly an objective of the Consumer Duty around Fair Value, Consumer Understanding and Consumer Outcomes. In the training we deliver, we look at whether the customer’s objectives are clearly explored so that we can then assess the outcomes delivered against these objectives in the short, medium and long-term. This is very important in a debt solution that may last more than 10 years. Determining the required ‘check-in’ points is important and we touched on this in the Collections & Vulnerability Summit around long-term payment arrangements. Insurance, mortgages, credit cards and debt solutions are all likely to be long-term relationships where horizon scanning can only be taken so far without regular monitoring and engagement.    

Last week, the FCA warned insurance providers warned not to undervalue cars or other insured items when settling claims. The rising cost of living may be putting increasing pressure on insurers to control claims costs, but some of the ways that insurers may look to reduce these costs could ultimately be harmful to consumers. Motor and home insurance policies may also be a source of potential fraud, which needs to be balanced with genuine claims.

The FCA set out in a Dear CEO letter in September 2022, that it expects firms to handle claims promptly and fairly and they should consider the impact of inflation when they cash settle claims and the likely difference in price for a consumer to replace an item or carry out repairs compared to a firm.   



Good collaborations recognised – ReachOut with Anglian Water and Nationwide

We have previously carried these stories on the bulletin. David Murphy was in action at the Credit Strategy awards dinner this week. I have to be careful with the abbreviating the title of the awards ceremony after comedian got stuck in. I have also filtered out most of the alcohol on the table.  

See also  DEMSA update: SDRP consultation submission / BoA decisions / FCA update / WADA SDRP statement / Events


Insolvency statistics

The Insolvency Service publishes official statistics on a regular basis, covering insolvency numbers, enforcement outcomes and Breathing Space applications. They are interested to hear from stakeholders if the statistics publications meet your needs and whether any improvements or changes are required to help improve your experience.

The survey is open till 2 January 2023 and includes questions about all the statistics publications we produce, covering format and delivery of the publications.


Standard Financial Statement Governance Group – 6/12/2022


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I am virtually attending the next governance group on Tuesday. We are considering updated Terms of Reference for the SFS and the 2023 spending guidelines. The proposed Terms of Reference reflect that the Debt Advice Steering Group (DASG) no longer exists and a new mechanism is required if there is not agreement on the new spending guidelines or the methodology behind them. We appear to be heading to a majority vote from parties on the governance group. Craig Simmons has now left MaPS.   

The spending guidelines are meant to be derived from the ONS’ Living Costs and Food (LCF) Survey. This approach means that the SFS spending guidelines are rooted in the actual behaviour of low-income households. Rising inflation has meant that these figures are meaningfully out-of-date. The latest ONS’ LCF Survey for 2020/21 was not published on time to be included in the modelling of the spending guidelines.

At the last January 2022 Governance Group meeting, we approved a control on the 16-18 years old household members to limit the volatility seen in this category in previous years. The limit is set to a maximum of ±12% variation from year-to-year. Similar to last year, MaPS is proposing that we apply again this limit to the Personal Category spending guidelines on the 16-18 years old. The sample size was again small.

I will report next week on what is agreed, however, the uplift to key spending categories like housekeeping look like they will be well below headline CPI. I suspect that many would question the optimism regarding inflation peaking and reducing through the course of 2023.

Increases in prices have a differential effect on households depending on how much of their income is spent on those goods and services. Households with lower income spent proportionally more of their total expenditure on essential goods and services than households with higher income. Using data from the ONS, the following graph shows this negative correlation between households’ income and their total expenditure on goods and services which have been driving the recent high levels of inflation in the UK. Households in the bottom income quintile destinate more than 55% of their total expenditure compared to the top quintile which is around 40%.

I suspect that a meaningful part of the discussion on Tuesday will be around whether there is sufficient protection to avoid multiple reviews of the SFS figures if inflation continues to rise. I hope that I can share this data once agreement is reached by the group.

Principal/AR Regime (PS22/11) – 8/12/2022

The FCA has published new rules to make authorised financial firms more responsible for their appointed representatives (ARs). As part of their enhanced reporting requirements, principal firms will receive a mandatory section 165 data request for information about their ARs. They will issue the request next week.

They will send the S165 request by email to the Principal User on Connect. Firms should ensure their details are up to date. If you are a principal firm and you do not receive the S165, please check your spam/junk folder in the first instance. If the request is not there, please email the FCA at and a new email and corresponding link will be sent to you.

The S165 request will be accompanied by detailed guidance explaining how to complete the request and will also include a link to FAQs that will be published on the FCA website on 8 December.

Firms will have until 28 February 2023 to respond to the request. Information request responses will inform the targeted supervisory work across sectors and portfolios. Sections 2.44 and 2.81 of policy statement PS22/11 provide more information. 

The FCA has reminded firms that their rule changes come into force from 8 December 2022. Principals should read the updated rules and expectations and take any necessary steps to be ready to comply. A number of providers of debt advice have ARs on the FCA register, including insolvency practitioners. This also applies to DCAs with ARs.


VPR scheme – June 2022

I have just received the slides from the IPA conference last week (24/11). I thought everyone might be interested in this slide from Dave Holland’s deck on the VPR scheme.

See also  DEMSA update: MaPS awards / Consumer Duty / 'Making Ends Meet' / Data sharing / Gov-Debt / Events

The Insolvency Service quoted circa 350,000 open IVA cases in totality at the IPA event. So, volumes providers represent about 65% of all open cases. In the 2021 report, they represented 68% of all cases. Homeowners look very low proportion of cases. Much lower than my previous experience with commercial DMP portfolios. 38.6% are in the typical average DI range for a DMP that we submitted to HM Treasury for the SDRP response where the disposable income is broadly the same as the £150 average. The average debt is higher at £25,481 compared to a figure of just over £18,000 for DMPs.   

There is a very large segment in the danger zone below £100 disposal income relative to likely cost-of-living influences.


We will be issuing a separate update on a range of training services later in December. This will include face-to-face, live virtual events and recorded training on a training platform offering CPD.


View from the Chair: Credit & Collections Technology Think Tank round up – 17/11/2022

Chris Warburton has provided a summary of his observations from chairing the Credit-Connect Think Tank in November 2022. DEMSA attended the event and the evening awards dinners, where I was a judge.

Chris spoke with Paul Banks of TMAC in a live LinkedIn interview this week.


Payplan wins ‘Debt advice provider’ award at the Credit Strategy awards dinner

I asked Rachel Duffey whether she was Eastenders or Coronation Street in this annual battle of the Fair Share providers. She concluded ‘Eastenders’. My photography skills are often questioned by my family and professional colleagues, however, Andrew Alder used one of my photos in his LinkedIn post for the PayLink award and I have another exhibit with the PayPlan team and the aforementioned comedian with festive lights in the background. Not long before bedtime and I think the light was fading on me/designated photographer.

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Peter Munro (right) posted: “We’re delighted to be named Debt Advice Provider of the Year and to win the award for the second year in a row makes it even more special as there were some great organisations shortlisted.”

Definitely a bonus being on the table of multi-award winners and a thank you for your hospitality.

Debt charity StepChange has announced that it has appointed Charlotte Chambers as Chief Technology & Information Officer

Charlotte is currently Senior Director – Ecommerce Technology at supermarket chain Asda and will join the debt charity in late March 2023. Jo Smith who has been Interim Chief Technology and Information Officer since September 2022 when Lorna Allan left and joined the Northern Care Alliance NHS Foundation Trust.

Debt Management Connected event at Toynbee Hall – 28/11/2022

I enjoyed attending this event last Monday in London, which included some flipchart brainstorming. There were quite a few posts of the back of my head. There was strong sunlight coming through the window below, which increased the risk of reflection off my pate.

As well as Heidi, the Elifinty team and Engage Comms, they had Bob Winnington of MLAG, Muna Yassin MBE of Fair Money Advice and Barbara Reichwein of Impact on Urban Health.  

Helen Lord and Carolyn Delehanty contributed to a session entitled ‘Data requirements for a national Priority Services Register (PSR)’ on 29/11/2022

I am hoping to get some feedback from this session from Helen or Carolyn in a future bulletin. The aim was to bring together utility companies, relevant government bodies, charities, and the third sector on how they can work more effectively together. Customer’s and Service Users’ information regularly changes which results in data being out of date almost as soon as it is collected. This workshop was designed to focus on the data requirements and how we can cleanse and update data on a regular basis to ensure it is kept up to date. Not only ensuring that those who qualify for the register get the support they need, but automating the process for Utilities companies to save them time and money.

We have a number of interested parties on the circulation.


VRS webinar on 13/12/2022


Aveni – ‘Consumer Duty: The Chief Risk Officer (CRO) Survey Results’ – 15/12/2022

The results of the Aveni survey of CROs and Senior Risk & Compliance Officers from across the UK Financial Services sector highlight a gap between where organisations currently are and where they need to be to comply with Consumer Duty regulations.

Join Aveni CEO, Joseph Twigg and COO, Jamie Hunter in this webinar as they unpack the results of the survey, providing key insights from YOUR peers into CRO challenges and critical activities in meeting FCA’s Consumer Duty requirements.


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