DEMSA update: Economy / Debt advice – value-for-money / August debt stats / Consumer Duty / Events

In today’s bulletin

  • General update
  • FCA communications around Consumer Duty readiness
  • StepChange and The Debt Charity August 2022 stats
  • Events

General update

A disturbing week for most UK citizens with a very volatile economy and political climate that is not only impacting basic cost-of-living, but also key assets like pensions and house prices. I get a sense that the majority of us are bewildered around the lack of control we have over our own destiny. Tensions between new ministers and the likes of the Bank of England (past and present governors) and the IMF don’t inspire confidence. The markets don’t like surprises and neither do we. Low consumer confidence often results in inertia and people not behaving in the ways expected when increasing interest rates and reversing MPC published decisions on selling government bonds to protect pension investments.


Ofgem ‘deep dives’ into energy providers

Ofgem has been conducting a series of market compliance reviews to make sure energy suppliers are kept up to scratch. The link to the ‘explainer video’ is above. Their most recent review has taken a close look at how suppliers support customers in payment difficulties. Issues have been identified ranging from minor through to severe weaknesses, or failings. On 27 September 2022, they published this Market Compliance Review of how energy suppliers help customers in payment difficulties. My provider, British Gas, came out relatively well.

A little belatedly, Ofgem is trying to promote what they are doing to champion consumers.

Ofgem has already issued Provisional Orders to Utilita and ScottishPower, requiring specific and urgent actions, and the regulator will also consider whether enforcement action is warranted for other suppliers. 

When related to the FCA expectations, there are some alarming weaknesses, including providers with non-existent policy relating to customers in payment difficulties, a lack of management oversight in the quality of their customer engagement and a lack of adequate training materials. On a forward looking basis, many providers need to evidence prioritising vulnerable customers struggling to pay their bills during this winter is critical. This has been picked up by Helen Lord, CEO of VRS, this week. It looks a little chilly when she is doing the interview. Quote from ‘Women in Credit’ award winner Helen:

“Great to have the opportunity to talk about the impact of the cost-of-living on the BBC today. Hoping that now is the time when companies come together and really start working to share data to support the vulnerable.”

As DEMSA reported in a recent bulletin, UKRN has announced the progress of their cross-sector work, which includes Ofgem and Ofwat. This was focused on timely access to debt advice, but the same collaboration is required around sharing data around vulnerability. The FCA has referenced the collaboration ahead of the first Consumer Duty milestone on 31/10.

Quote from Sheldon Mills last week:

“We continue to play our part and look for joined up solutions – because financial service products form just a part of the household bills. With partner regulators and debt advice charities we are driving forward work through the UK Regulators Network to ensure consumers can access the support they need across sectors including energy, water, and financial services, as a first step.”

UKRN want cross-sector consistency of consumer journeys and clarify supply chain expectations so service users get better outcomes and are confident contacting creditors. This is especially true of those with characteristics of vulnerability, where services like VRS allow tailored treatment paths depending on what someone is vulnerable to. I attended a great event with FourNet on Thursday (they provide ‘blue light’ services), where identification of vulnerability on emergency calls could make a real difference.

We have started to see water providers pushing for a ‘single version of the truth’ around the Priority Service Register (PSR). A ‘tell us once’ approach is only viable where firms routinely access these critical resources and keep them up-to-date, as vulnerability is dynamic and can be transitional. Actively involving carers in this process is vital.


WADA has flagged non-compliant behaviour by some energy providers, including those flagged by Ofgem.


Amplifi and StepChange collaboration – Mixed Message – published 29/9/2022

My thanks to Minesha and Faith for the new report from StepChange Debt Charity and Amplified Global™. This uses the lived experiences of people in debtand highlights the crucial role communications from the financial services sector and other creditors can play in helping consumers in financial difficulty. The report, Mixed Messages, assesses the extent to which communications from creditors help people take action to resolve their debts. It finds that while communications can sometimes be effective, many of those surveyed said they faced barriers to getting the help they needed. Only a minority felt the communications they received had helped them understand their options or reassured them that help was at hand.

The summary and full reports are very enlightening. Overall, 69% of those surveyed felt they could have been signposted to debt advice earlier, with 53% of StepChange clients surveyed waiting more than a year before seeking debt advice. In the current cost-of-living crisis, we just can’t afford that time lag. The worry is that many will make decisions not in their best long-term interest in the period in between. Creditors have a vital role to play in better engagement and I have reflected on this in my recorded interview with Peter Wallwork.

I have commented on the Credit-Connect Customer Experience (CX) post on LinkedIn.  Some of the work Amplifi is doing is hugely helpful to transformation planning for the FCA Consumer Duty readiness planning. Some of the messaging this week by Sheldon Mills to regulated firms ahead of more comms events in October and November is also very timely, where is still feels like the ‘lull before the storm’.

Amplifi tooling allows a ‘bottom-up’ and ‘top-down’ approach. This not only applies for CX, but also Employee Experience (EX), where agent language needs to fully engage with the customers they communicate with. Changing the collateral is only one dimension and speech analytics/NLP now allow more comprehensive analysis of higher risk communications where the agent (including virtual agents) transcript can be separated from the client-side transcript. Supporting staff dealing with stressful contacts is rising up the corporate priority list and the wider risk management agenda.

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

We have a number on the circulation looking at enhancing both customer and agent journeys where technology is an enabler, but where fundamental business transformation is the requirement aligned with strategic change objectives agreed at the highest level.

Faith Reynolds, Amplified Global™ Research and Strategy Lead, said:

“People are deeply affected by financial difficulties and the communications they receive as a result. Words inform interpretation and the way we make sense of the world around us. Debt communications aren’t working well to help people get the support they need in a timely manner. Now’s a good time to reassess the purpose of legal and regulatory communications so they deliver the good outcomes envisaged by the FCA’s Consumer Duty. Amplified Global™ looks forward to continuing its work with StepChange to make sure credit and debt communications lead to more people getting help quicker.”

I have attached the summary report. Minesh Patel can be contacted at


Adam Thornber, Senior Partner of Bridgeforce, spoke at our Credit Union event on 28/9/2022. He has a long background in collections at UK major creditors and I picked up on this same day Bridgeforce post that aligns with some of the communications messages by Amplifi. This covers fixes to reduce customer complaints in collections. They have focused on the 4 areas that have the highest probability of influencing complaint volumes:

  1. Customer Interaction Training
  2. Collections Correspondence
  3. Digital Engagement
  4. Dialer Configurations

Where the second really resonates with some of the Amplifi messaging. It also resonates with a number of the CX and EX propositions being considered as part of the Consumer Duty change programmes and inclusive design principles around ISO 22458.  


I was also interested in their BNPL article covering the US and UK. Graphic above is US, where 61% of Americans have used BNPL services to pay for an item they needed, with 53% having done so “out of necessity”. 22% used a credit card to cover BNPL purchases. 60% of consumer say rising inflation makes them more likely to use BNPL products. Bridgeforce has reflected that traditional financial institutions are getting into the BNPL space like HSBC, Barclays, Virgin Money and NatWest. I am seeing more products and services around spreading the costs of things like vehicle repairs and servicing that need to be built into budgets when undertaking financial reviews. This was a taxing question when we looked at what should be in or out of a Statutory Debt Repayment Plan (SDRP) and what represented allowable credit, including aspects like insurance premiums paid by instalment.    


Fair4All Finance and Fair Finance agree £3.3m social investment deal to tackle financial exclusion across the UK

The funding will support Fair Finance’s journey towards becoming a more tech enabled business, while also allowing it to scale significantly to become a leading provider of affordable credit and a realistic alternative to high-cost finance. This is obviously very topical and consistent with some of the messaging from the Credit Union event that Chris Warburton chaired on 28 September.  

This investment deal will allow Fair Finance to develop and expand a wider range of services to improve financial resilience amongst low-income communities across the country. Community services is another very topical item where I spoke with Andrew Duncan, CEO of SOAR, before the Credit Union event and the front and back-office services they are building for Credit Unions and NILs providers. It was also interesting to hear from FourNet this week around their very secure community cloud propositions. The editor of Computer Weekly discussed the emergence of cloud-first in the public and private sectors, which is particularly helpful to community providers like Credit Unions where they can benefit from economies of scale and infrastructure investment, but operate on a consumption-based pricing model, where they may benefit from preferential offers because of the nature of the services they provide to the more vulnerable members of society.

As with social tariffs, these emerging schemes need to look more innovatively around eligibility criteria as the cost-of-living crisis hits different demographics, some harder than others.         


IE Hub Joins Forces with StepChange and C&R Software to Support Consumers in Financial Hardship

This partnership will see IE Hub’s income & expenditure sharing solution integrated with both C&R Software’s Debt Manager platform and StepChange’s debt advice and support solutions service. This is technology enabler for creditors which will allow I&Es to be conducted in Debt Manager, seamless sharing of I&E data with third-party organisations, earlier identification of customers at risk of financial difficulty, and quicker intervention to free debt advice to support these customers.

DEMSA continues to feature strong collaborative initiatives where best practices are embedded in a range of ecosystems serving different industry sectors with common challenges around the cost-of-living crisis. As reflected in my interview with Peter Wallwork for the MALG NE event, collaboration between the creditor and debt advice sector is vital facilitated by a range of service providers. UKRN and the FCA have picked this up in recent press releases and speeches.

I have attached the press release. 

PayLink launches new website

This has been timed with the launch of their latest Embark platform.



Inicio AI interview with Chris Warburton

Rachel Curtis-Bowen, CEO of Inicio AI, speaks with Chris on one of his recent recorded interviews. Rachel discusses conversational AI and the understanding of human speech in context to what is being discussed. It is an enabler to even greater levels of functionality, to allow process scalability and free human resource to add more value elsewhere, which is at the heart of many customer experience (CX) and employee experience (EX) propositions as we all prepare for major transformation programmes driven by a range of strategic imperatives.   

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They have recently been selected as part of Edinburgh DDE’s AI Accelerator Programme.

We are hoping to feature a few more of these going forward, where many on the circulation have been interviewed in an environment where Chris makes you feel very relaxed.



MaPS update on debt advice commissioning: community-based debt advice in England

On a very related topic to the MALG NE debate covered below on the quality and value-for-money from debt advice, MaPS has confirmed the grants to be offered to current MaPS-funded providers of community-based debt advice in England. New grants will be effective for a period of 26 months starting from 1 February 2023. There is an annual allocation of £30m to fund community-based debt advice, including face-to-face provision, as part of £76m total funding for debt advice in England. The ongoing delivery of debt advice is assured while MaPS continues work with the sector to develop longer-term thinking on community-based services.

During the course of the 26-month grants, MaPS will continue to engage with debt advice clients, advisers, advice organisations and other stakeholders to identify the best ways to commission locally based services long-term. MaPS is currently in an evidence-gathering phase which will continue for at least the next year, followed by a formal public consultation in late 2023. Consideration of the needs of service users, the current funding landscape of the debt advice sector, the impact on people of the pandemic and increases in cost of living will be primary goals of this work.


FCA communications around the Consumer Duty

I suspect that many on the circulation have been trying to relay the same message as DEMSA around avoiding complacency and it feels like the FCA are upping their messaging beyond the ‘Dear CEO’ letters in June 2022. Sheldon Mills made a speech on 29 September where he is quoted as saying:

“Be in no doubt: the Duty will be a significant shift in what we expect of firms. It means making lasting changes to culture and behaviour to consistently deliver good outcomes.”

More messaging has gone out to the insurance sector around the cost-of-living crisis. Robust implementation plans need to be ready for 31/10/2022, potentially for discussion with the regulator. The FCA is running webinars in October and at the start of November (1/11) to restate their expectation of regulated firms.

Whilst firms may not have fully scoped all work required to embed the Duty by the October deadline, plans should be sufficiently developed to provide their governing bodies and the FCA with assurance that the Duty will be fully implemented for new and existing products by next July 2023.




Cost of living remains most common reason for debt among new StepChange clients – August 2022 report

August 2022 saw the highest volume of new StepChange clients (around 15,340) who received full debt advice in 2022, with 76% completing this online.

A growing proportion of clients cited the ‘cost of living’ increase as their main reason for debt (22%). This has become the most cited reason following 3 consecutive months of 2% increases. Ahead of further interest rate rises, there was a slight increase in the proportion of new clients who are homeowners in August 2022, which accounted for 18% of clients.

August is the first month in 2022 where the proportion of clients with electricity and gas arrears has not increased further.


The Money Charity statistics have also been published and one of the striking numbers they have highlighted is that 3m UK adults (around 29%) say they have had to use credit to pay for essentials. We obviously need to differentiate between using existing facilities like overdraft and credit cards with new lines of credit like BNPL. MAT has also flagged on 30 September 2022 rising borrowing. The Bank of England published its latest Money and Credit figures showing consumer credit continued to grow at 7% in August 2022. The annual growth rate of credit card borrowing was 12.9% with outstanding balances for consumer credit now standing at £205.1 billion.

Citizens Advice Bureaux across England & Wales answered 408,737 enquiries in August 2022, 18.4% up from August 2021. Debt was the second largest advice category in August 2022 with 65,242 issues, behind Benefits and Tax Credits (97,080). Debt calls were 11.7% up compared with August 2021. Debt represented 14.6% of all issues dealt with in the year to August 2022. The top 3 debt categories in August 2022 were fuel debts, council tax arrears and credit, store and charge card debts.

In Scotland in July 2022, Citizens Advice Scotland gave 76,640 pieces of advice, with debt advice being 10% of the total. Debt advice in July 2022 was the second largest category after benefits.




Staying ahead – Credit Union event – 28/9/2022

Chris Warburton and Heidi Oliver coordinated this event targeted at the Credit Union sector, with a number of key support providers on the session, including trade bodies like ABCUL and the Illegal Money Lending Team (IMLT). The event was run during the Stop Loan Sharks week and awareness of this campaign has been ongoing through the week with many debt advice providers strongly supporting. Details of the event can be found at the link below.

If you are interested in the video, presentations and/or survey results then please contact Chris ( or me. Attendees should have received an email from Chris on the day of the event.    


See also  DEMSA update: Consumer Duty / CP23-5 / IVA report 2022 / IMLT / DORA / Training / Events

What you can do to Stop Loan Sharks with Cath Wohlers


MALG North East forum – CSA article on the value-for-money of funded debt advice29/9/2022

I managed to double book myself for this MALG event and Lee Usher arranged for a video recording of my slot with Peter Wallwork. My Trustfolio interview is still due out with the same parties having interviewed me. My thanks to both Simon Towers (YouTube) and Chris Warburton (Vimeo) in setting up the links below. Chris and I are due to have another recorded chat on the Consumer Duty next week as we countdown to one month to go for implementation planning.

Lee has posted on LinkedIn and a number have joined the debate. The event was supported by Bob Winnington (MALG), Henry Aitchison (CSA), Craig Simmons (MaPS) and Andy Shaw (IMA).  

Some of you may recall the review of this Credit Services Association (CSA) report entitled ‘Wide of the mark?’ in May 2022 where Henry Aitchison assesses the delivery and value of free-to-client debt advice. It can be accessed from the link above. I also managed to speak with Henry on Tuesday 3 May 2022 just after it was published. My recorded interview is part of the industry debate that took place live on 28 September.

The report entitled ‘Wide of the Mark? Assessing the Delivery & Value of Free-To-Client Debt Advice’ argued that consistent and high-quality debt advice serves a very important role in helping people navigate financial challenges, especially when the cost-of-living is rising, but also believes it is essential that the questions of value for money, efficiency and accountability are addressed. DEMSA agreed with Henry that consistent and high-quality debt advice (irrespective of channel of advice) serves a very important role in helping people navigate financial challenges, especially during the cost-of-living crisis.

Henry raised the thorny questions around value-for-money, efficiency and accountability, where the current MaPS debt advice commissioning process has not been without its problems despite clear support in the DWP report in late 2021. Christopher Woolard strongly supported the 3-year awards before leaving the FCA and after when he joined E&Y. As reported above, we are starting to get MaPS announcements of future funding for regional and community debt advice.

The CSA has recommended greater emphasis on consistent standards and outcomes for customers, in-line with outcome-focused objectives of the FCA Consumer Duty. The MaPS statement-of-requirements for primary national contractors (Lot1) laid this down very clearly (including quality standards) and are very aligned with FCA future conduct expectations. They are also likely to align with the ISO 22458 inclusive design principles.

The report covers a number of aspects close to the heart of consumer credit firms, including levies to fund free-to-consumer debt advice and the ongoing role of the ‘Fair Share’ scheme ahead of the introduction of Statutory Debt Repayment Schemes (SDRPs) at some point in the future. Henry makes some very strong arguments around the concept of ‘polluter’ pays, including the funding of FSCS. Recent media coverage of the affordability challenges point to major problems in the energy and utility sectors, where they are benefiting from debt advice providers funded by the financial services sector.

Link: or  

FourNet digital transformation event – 29/9/2022

I attended a great digital transformation event hosted by FourNet at Somerset House in London. Bryan Glick, Editor of Computer Weekly, was the keynote speaker. He provided a summary of trends before addressing the main audience. Customer experience (CX) and employee experience (EX) were key themes. Unfortunate picture of the back of my head (left of picture) with Mehmet from Ceverine. Presentation by Richard Pennington, CEO and co-founder of FourNet.

Interesting to hear about the changes in corporate priorities, both business and technical, over the last few years. Risk management, ESG and cyber-security are right up there. These are all key topics for those bidding for public sector contracts, where we recently featured the Crown Commercial Service (CCS) updates to the Debt Resolution Service framework around Social Value in debt recovery.

I am attending the Govnet debt management event on 11 October 2022 where we will probably hear a number of these key messages reinforced by HMRC, DWP and other major players in this space.   


On a related topic, UK Finance published a blog on operational resilience and third-party risk management. This was very apparent at the FourNet event when delivering high secure and scalable cloud-based services to emergency and essential service providers. Scenario planning is next on the agenda where firms must create and justify challenging but realistic scenarios that they can use to plan practical and realistic resiliency models, to show how their mapped resources – internal and third parties – would meet the demands of these scenarios. These need to incorporate data integrity issues and the potential for failures amongst third-party suppliers.

They have also posted a blog entitled ‘Is cloud technology the key to improving ESG data’.



Vulnerability Summit – 5/10/2022

This has been postponed because of the rail strike, which is disappointing.

Vulnerability training event on 17 October 2022

As discussed above, the FCA non-handbook guidance (FG22/5) and the vulnerability guidance (FG21/1) needs to be re-aligned to this with PRIN6 and the 6 TCF outcomes being dis-applied by July 2023. KYVC checks need to be reviewed and new KPIs established to be able to robustly answer many of the questions posed by the FCA in FG22/5.

BSI ISO22458 webinar – 9/11/2022

There is a free webinar for those firms who fall into the BSI ‘generic’ scheme (i.e. not Financial Services, Energy or Water) for ISO 22458/Inclusive Service Kitemark on the 9 November 2002


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