DEMSA update: MaPS report / Cost-of-living / Digital Engagement / FOS news / PSR Annual Plan / Events

From the desk of Kevin Still

In this week’s bulletin

  • General update
  • MaPS – Driving forward change to support those in need
  • MaPS – call for evidence report – Access to debt advice during COVID-19
  • Digital engagement
  • Payment Service Regulator – Annual Plan 2022/23
  • FOS – Ombudsman News 170
  • The Betting and Gaming Council join the ICO Sandbox
  • Events

General update

We have seen headlines that ‘Energy websites crash in meter readings rush’. PayPlan and others have been encouraging consumers to take meter readings before tariffs go up. Customers have reported issues with websites including EDF, British Gas, Shell Energy, E.On, SSE, Scottish Power, So Energy and Octopus Energy.

Earlier in March 2022, Citizens Advice published some energy policy research around the cost-of-living crisis. Citizens Advice found that despite the government’s support measures:

  • 5m people will be unable to afford their energy bill when prices rise this month
  • 14.5m will be unable to afford their energy bills from October 2022

Polling commissioned by Citizens Advice shows that 47% of people on low incomes predict that they will fall behind on their essential bills, or cut back on essential spending. Clear thinking is required in both the debt advice sector and with debt resolution firms around how we differentiate between consumers that were already in financial difficulties and those that have now fallen into problem debt because of cost-of-living factors outside of their control, much like when many consumers were furloughed and only received 80% of usual take home pay. I am convinced that providers will want to see continuity of pre-April 2022 payment levels (if affordable) rather than missed payments. This is going to require a longer-term outlook for both debt solutions and time-to-pay (TTP) arrangements. Consumers will be concerned around the impact on their credit file if they stop paying unsecured creditors in order to pay rising essential costs. It comes as there is strong evidence that unsecured credit usage is on the rise, where we will start to see everyday costs paid by credit card or alternative forms of credit (e.g. BNPL). Breaking consumer behaviour around maxing credit facilities before seeking debt advice has been a challenges for decades and one that we need to collectively work on, especially around building trust in earlier engagement and the consequences.  

Link: https://www.citizensadvice.org.uk/about-us/our-work/policy/policy-research-topics/energy-policy-research-and-consultation-responses/energy-policy-research/crunch-point-protecting-households-from-record-energy-bills-in-the-coming-months/

Money Charity – February 2022

Citizens Advice Bureaux across England & Wales answered 401,861 enquiries in February 2022, 5.8% up from February 2021 with debt being the second largest advice category with 67,117 issues (behind Benefits and Tax Credits = 91,417). Debt calls were 10.4% up compared with February 2021 and represented 16.5% of all issues dealt with in the year to February 2022. The top 3 debt categories in February 2022 were fuel debts, council tax arrears and credit, store and charge card debts.

The report states that StepChange that 14,000 new clients received full debt advice in January 2022. The most common reasons for seeking debt advice were “lack of control over finances”, reduced income or benefits, unemployment or redundancy and an injury or health issue. 68% of clients had credit card debt, 50% had personal loan debt, 36% had an overdraft and 38% had catalogue debt. The majority of StepChange clients are female (64% in January 2022) and young (61% under the age of 40).

The headline says ‘UK Turns To Credit and Debt to Manage Cost of Living Crisis’.

Link: https://themoneycharity.org.uk/money-stats-march-2022-uk-turns-credit-debt-manage-cost-living-crisis/

MAT has also focused on usage of credit to makes ends meet. They have come off the back of the Bank of England Money and Credit figures showing consumer credit growth increased to 4.4% in February 2022 from 3.2% in January 2022. The annual growth rate of credit card borrowing was 9.4% with outstanding balances for consumer credit now standing at £199.5 billion.

Link: https://www.moneyadvicetrust.org/latest-news/one-in-four-using-credit-for-essentials-as-rise-in-consumer-credit-continues/

IPA response to new insolvency regulations

The IPA has responded to the government’s consultation on the future of insolvency regulations, as well as the 2021 Benchmark Report on the IPA Volume Provider Regulation Scheme.

Link: https://insolvency-practitioners.org.uk/news-and-notifications/  

MaPS – Driving forward change to support those in need

Caroline Siarkiewicz, MaPS CEO, has showcased the MaPS work to transform debt advice to help those most in need. She has reflected that the debt advice commissioning process is taking longer than they had hoped (see next topic). She knows that it is frustrating the bidders and advisers alike. She had confirmed the procurement of new services for national and business debt advice, and for 2 of the 3 DRO administration hubs.

MaPS continue to coordinate the UK Strategy for Financial Wellbeing which is intended to improve people’s relationship with their money and pensions throughout their lives.

QA framework for debt advice

From last Friday, MaPS will be aligning quality assurance testing to the FCA approved MaPS Standards and they will be providing guidance and tools to support partners in working towards compliance with these Standards. The new QA Framework will focus on assessing the suitability of advice against the MaPS Standards and the adequacy of the controls in place. They acknowledge that it will take some time to develop a new framework and will be working with key partners for the next 10 months to complete a “test & learn” phase and take further feedback on implementation. This phase will help identify gaps, opportunities for continuous improvement and reflect feedback and learnings gained through sector engagement. My fear is that this will be taken seriously by some (i.e. those subject to contracts and service level agreements in Lots 1, 3 and 4), but not others (see below).

It is important that the QA Framework takes account of the emerging technologies (e.g. Natural Language Processing) and equivalent QA approaches irrespective of channel, including mixed channel delivery (i.e. Omni-channel). Many of the providers on this bulletin have focused on how this is achieved consistently across channels to measure outcomes and identify customer journeys where this may not be the case. This is often more straightforward when you are the debt solution provider and can monitor customer progress well beyond the initial debt advice session.   

Link: https://moneyandpensionsservice.org.uk/2022/03/23/driving-forward-change-to-support-those-in-need/?cn-reloaded=1

MaPS report – Access to debt advice during COVID-19

Following their call for evidence on 28 September 2021 (‘Call for evidence on access to debt advice during the Covid-19 pandemic’), MaPS has published their findings (attached). The report can be downloaded from the link below. UK Challenge Group drove this activity, as they were concerned that the overall fall in demand for debt advice seen during the pandemic was partially driven by some vulnerable groups needing debt advice, but not being able to access it because of the closure of in-person services. As reflected in the DEMSA October 2021 ‘Hybrid-working bulletin’, MaPS want to draw on the lessons learned regarding how community debt advice services might be designed and delivered in future to reach and engage people in vulnerable circumstances, and to support funded debt advice agencies to put the right business continuity policies and procedures in place to manage system-wide disruption to services.

The report high-level findings reflect some of the challenges for the Lot1 (national) providers with regard to when to refer a customer to community debt advice. MaPS state that ‘in-person debt advice services’ delivered in community settings will continue to best meet the needs of some clients, particularly for those dealing with more complex problems. MaPS recognise that identifying who these clients are will require further research. In the interim, national providers will need to look at the complexity that may warrant effective transfers to local providers and report back on the outcome of these referrals under the wider MI reporting requirements. A similar challenge exists with regard to the extent of income optimisation activity on new debt advice sessions, where some may be significantly more complex than others.    

Given the confrontational tone of the correspondence from ‘We Are Debt Advisers’, using the lessons learned as an opportunity for greater collaboration between advice providers to meet clients’ needs seems a long way off. There is some way to go in getting all stakeholders to recognise the importance of adapting to the wider ecosystem in which debt advice sits. This needs to include recognition that technology will play a greater role in building resilience and enabling more flexibility in the way debt advice services are delivered in the future. MaPS has stated that it is critical that services are modelled around retaining some elements of end-to-end remote advice for the foreseeable future. Indeed, these are fundamental principles in the statement-of-requirements for debt commissioning in terms of continuous improvement and inclusive design.

Unite has responded to the report. This includes urgent ‘demands’ (attached) on MaPS, which unfortunately reflects the tone that I have referenced above and don’t seem to reflect any of the wider government thinking that I referenced in the DWP review from November 2021 that we issued a Blog on in January 2022 when we thought that the MaPS awards would be announced. The nature of the demands still seems to ignore the requirements to meet emerging regulatory standards in terms of quality of debt advice and the ability to measure outcomes which are determined by the FCA. It appears that the FCA Consumer Duty hasn’t filtered down to individual community debt advisers as yet.      

See also  Credit & Collections Technology Think Tank 2021 Session 1

Link: https://unitedebtadvicenetwork.org/2022/03/24/unite-debt-advice-network-responds-to-the-money-pensions-service-report-access-to-debt-advice-during-covid-19/

At a Social Value level, MaPS has recommended a sector-wide approach to supporting workforce wellbeing needs to be developed, particularly as hybrid-working evolves allowing a more diverse workforce and access to wider talent pools (potentially outside of the community boundaries). Use of best practices and specialist providers requires a more open-minded approach.

Anna Hall, Head of Money and Debt Operations at MaPS, has written the foreword. She reflects that the move to a digital-first model during the pandemic helped some organisations manage capacity and service availability more effectively. Investment in digital e-signature platforms and secure document transfer and storage solutions also made services easier to access and more convenient to use during the pandemic. She also acknowledges that responses from some individual debt advisers tended to be more negative compared to those submitted by debt advice organisations. These advisers found remote delivering of debt advice more complicated and time consuming, which negatively affected their wellbeing. For debt solution providers, the transformation to hybrid-working has presented a number of challenges that they have worked through from March 2020 and evolved governance frameworks accordingly. This is obviously a forward-looking activity as we prepare for the FCA Consumer Duty and any emerging risks of delivering poor customer outcomes.  

Aside from MaPS, we really do need to get more representatives from the community debt advice sector to attend events like the Credit Summit 2022 to listen to directors of our primary regulator and senior economists. They also need to listen to the direction of travel of mainstream and challenger credit granters, including those that used to be in home credit. I spend a lot of time horizon scanning around looking at what firms (that are not reliant on MaPS funding) need to consider to keep their business models fit-for-purpose in a rapidly evolving world where innovation, regulatory compliance and high-quality customer care are pre-requisites, which include the operational and financial resilience referred to above, where operating models can rapidly adapt to key risks materialising.       

Link: https://moneyandpensionsservice.org.uk/wp-content/uploads/2022/03/access_to_debt_advice_during_covid19.pdf – report link

Link: https://moneyandpensionsservice.org.uk/2022/03/24/access-to-debt-advice-during-covid-19-pandemic/?cn-reloaded=1

Digital engagement

I would like to welcome Rachel Curtis, CEO of Inicio AI, to the bulletin. Inicio AI featured in the Credit-Connect Lending Technology Think Tank event last week that Chris Warburton chaired. I am looking forward to catching up with Rachel next week. Their proposition is a next-generation conversational AI assistant. This transcribes I & E items from chat in real-time, answers questions and can fill in forms. We have a few natural language providers on the circulation. As always, how these tools and capabilities integrate into the overall service delivery framework is important where transactional (consumption based) costs associated with a debt advice or debt resolution session are critical by delivery channel.

Link: https://www.linkedin.com/posts/chriswarburton_it-is-a-wrap-some-great-topics-and-ideas-activity-6914563248167997441–5ba?utm_source=linkedin_share&utm_medium=member_desktop_web

Payment Systems Regulator (PSR) Annual Plan and Budget 2022/23

The PSR has issued a fact sheet to summarise the plan and budget for FY 2022/23. The PSR has reflected that the payments landscape is evolving and with this, there are issues that need to be addressed. These include the prevalence of Authorised Push Payment (APP) fraud, risks to effective competition and the need to support the payments sector to deliver new and improved services. They expect further challenges as global events impact the cost of living, which may affect what people need from payments to support their daily lives.

Their work programme for FY 2022/23 focuses on improving outcomes for everyone who uses payment systems so they are fit for the future.

Link: https://www.psr.org.uk/annualplan22-23/

FOS – Ombudsman News 170

FOS has published their plans and budget for FY 2022/23 following the consultation that closed at the end of January 2022.

The FCA recently confirmed the increase to the FOS award limits, which is the maximum amount FOS can require a financial services firm to pay when they uphold complaints. This limit is adjusted each year in line with inflation, as measured by CPI.

From 1 April 2022, award limits changed to:

  • £375,000 for complaints referred on or after 1 April 2022 about acts or omissions by firms on or after 1 April 2019
  • £170,000 for complaints referred to on or after 1 April 2022 about acts or omissions by firms before 1 April 2019

In 2022/23, the Financial Ombudsman:

  • Expects to receive 177,000 complaints and resolve 220,500 complaints
  • Continue to ensure it is equipped to respond to complexity and vulnerability in complaints
  • Invest in a change programme, which includes working with regulatory stakeholders to deliver their ‘Action Plan’

The 2022/23 budget includes:

  • A cost base of £291.7m
  • An individual case fee of £750
  • A compulsory jurisdiction levy expected to raise to £106m
  • A voluntary jurisdiction levy of £700,000
  • Businesses outside the group-account fee arrangement will get 3 free cases (reduced from 25)
  • Businesses in the group-account fee arrangement will get 15 free cases (reduced from 50)

Link: https://www.financial-ombudsman.org.uk/news-events/ombudsman-news-170

Link: https://www.financial-ombudsman.org.uk/news-events/financial-ombudsman-service-publishes-plans-budget-2022-23

The Betting and Gaming Council have joined the ICO Sandbox

Betting and Gaming Council. ICO Sandbox participant.

As the largest UK operators, Betting and Gaming Council (BGC) members Entain, William Hill, 888, Gamesys, bet365 and Flutter have agreed to trial a solution for the sharing of data sets from participating gambling operators. The BGC are committed to driving change and raising standards to prevent the impact of problem gambling which can have a significant impact on those affected.

The aim of the trial is to facilitate fast, proactive intervention and to prevent incidents of problem gambling. The proposed mechanism will ensure that if customers have multiple accounts with different operators, then the operators will be able to compliantly share data. This will allow them to identify and help manage problem gambling behaviour.

BGC will work with the ICO, with close engagement from the Gambling Commission on regulatory considerations, to understand the data protection considerations for a viable solution. They will look to identify the appropriate lawful basis for processing data and the safeguards required, particularly where that data is special category. BGC and participating operators are committed to ensuring the personal data of customers is used in a proportionate and appropriate way to identify harm and welcomes the opportunity to explore these issues with the expert steer of the ICO.

DEMSA covered the ‘Single Customer View’ in October 2021.

Link: https://ico.org.uk/for-organisations/regulatory-sandbox/current-projects#betting

Link: https://www.gamblingcommission.gov.uk/news/article/an-update-on-the-single-customer-view-industry-challenge

Events

I featured last week the CICM Credit Awards and IncomeMax winning an innovation award. I managed to catchup with Dan Woodhead, Partnership Director at IncomeMax, yesterday. I would like to welcome him to the Saturday bulletin. The link below covers the other winners.

Link: https://cicmbritishcreditawards.com/live/en/page/2022-winners

VRS – The Vulnerability Jigsaw’s Next Piece – ‘Identification, Integration, Implementation’

I had a really good response to the invite issued during the week for the next VRS webinar on 14 June 2022. I have copied Kirstie on this email in case anyone wants to get in touch directly.

Link: https://www.eventbrite.co.uk/e/the-vulnerability-jigsaws-next-piece-tickets-290293093457?aff=ebdssbonlinesearch

Have a good weekend.

Regards

Kevin Still MCICM

M: 07980 859994

DEMSA LinkedIn site at https://www.linkedin.com/company/debt-managers-standards-association-limited/

Good afternoon everyone

Before we get into the doom and gloom of the cost-of-living increases, I wanted to show the contrast in weather from last Saturday to the snow and hale at the end of the week. Exhibit A below, evidence of my first BBQ of the season with my new apron and baby ‘stein’ that my son bought me. I think we were all surprised when it came out of the packaging at the actual size, as I was expecting something a bit larger with more beer in. Anyway, I probably couldn’t have lifted the full-sized version with my dodgy right hand whilst cooking supper and catering for all dietary requirements. We had a full gathering of the Stills with partners and Dora (aka Houdini), Tasha’s dog. Front car park at full capacity. Dog ‘escape prevention’ measures were deployed and cats were put in protective custody. In case you think your eyesight is failing, the shed in the background is at a near terminal angle held up by the fence that replaced the hedge and trees that I had to have chopped down during lockdown.

Completing my week down in West Sussex to see the Stills that missed the BBQ, I paid £1.84 for a litre of unleaded at Pease Pottage services.    

Exhibit A – first BBQ of 2022 (26/3/2022)

Fund raising has started for ‘Wellbeing of Women Fundraisers 10km Team’. We managed to get a good response on these fund-raising activities last year. It allows me to feature Tasha’s picture.

See also  Credit Risk: Online Lending Technology Think Tank 1.2
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Link: https://www.linkedin.com/feed/update/urn:li:activity:6914919825647538177/?commentUrn=urn%3Ali%3Acomment%3A%28activity%3A6914919825647538177%2C6914944657961484288%29&actorCompanyId=21858493

Link: https://www.justgiving.com/fundraising/TheWalkingWomen

There is some good footage of Mark’s (IE Hub) walk along Hadrian’s Wall. His team raised over £2k for Cancer Research UK.

Link: https://www.linkedin.com/feed/update/urn:li:activity:6914118071183941632/  

The England ladies Cricket team have worked a miracle by getting into tomorrow’s final against Australia after losing their first 3 games. The Indian IPL has started and we can watch a few of England’s better male players on display with leading franchises. Buttler (100) had done well at the time of writing for Rajasthan Royals against Mumbai. Rory McIlroy’s Masters preparations haven’t been good as he missed the cut at the Valero Texas Open. In Netball, Manchester Thunder (Tasha’s local team) extended their lead at the top of the Superleague table to 3 points and dealt Loughborough Lightning their first defeat of the season with a 66-61 victory.

Top story in the Lincolnite is that a Lincolnshire environment chief has questioned whether plans to reach Carbon Net Zero by 2050 are now achievable given issues including rising energy bills and the Ukraine crisis. In true politician style, the Conservative councillor said there had been a failure of energy policy going back 20 years to the Labour government. Meanwhile, we have a brand-new installation at Lincoln Castle that is opening this weekend. ‘Lucy the Dragon’ will be welcoming guests into the castle ground from today.

Link: https://www.lincolnshirelive.co.uk/whats-on/family-kids/gallery/first-look-lincoln-castles-stunning-6896581

In this week’s bulletin

  • General update
  • MaPS – Driving forward change to support those in need
  • MaPS – call for evidence report – Access to debt advice during COVID-19
  • Digital engagement
  • Payment Service Regulator – Annual Plan 2022/23
  • FOS – Ombudsman News 170
  • The Betting and Gaming Council join the ICO Sandbox
  • Events

General update

We have seen headlines that ‘Energy websites crash in meter readings rush’. PayPlan and others have been encouraging consumers to take meter readings before tariffs go up. Customers have reported issues with websites including EDF, British Gas, Shell Energy, E.On, SSE, Scottish Power, So Energy and Octopus Energy.

Earlier in March 2022, Citizens Advice published some energy policy research around the cost-of-living crisis. Citizens Advice found that despite the government’s support measures:

  • 5m people will be unable to afford their energy bill when prices rise this month
  • 14.5m will be unable to afford their energy bills from October 2022

Polling commissioned by Citizens Advice shows that 47% of people on low incomes predict that they will fall behind on their essential bills, or cut back on essential spending. Clear thinking is required in both the debt advice sector and with debt resolution firms around how we differentiate between consumers that were already in financial difficulties and those that have now fallen into problem debt because of cost-of-living factors outside of their control, much like when many consumers were furloughed and only received 80% of usual take home pay. I am convinced that providers will want to see continuity of pre-April 2022 payment levels (if affordable) rather than missed payments. This is going to require a longer-term outlook for both debt solutions and time-to-pay (TTP) arrangements. Consumers will be concerned around the impact on their credit file if they stop paying unsecured creditors in order to pay rising essential costs. It comes as there is strong evidence that unsecured credit usage is on the rise, where we will start to see everyday costs paid by credit card or alternative forms of credit (e.g. BNPL). Breaking consumer behaviour around maxing credit facilities before seeking debt advice has been a challenges for decades and one that we need to collectively work on, especially around building trust in earlier engagement and the consequences.  

Link: https://www.citizensadvice.org.uk/about-us/our-work/policy/policy-research-topics/energy-policy-research-and-consultation-responses/energy-policy-research/crunch-point-protecting-households-from-record-energy-bills-in-the-coming-months/

Money Charity – February 2022

Citizens Advice Bureaux across England & Wales answered 401,861 enquiries in February 2022, 5.8% up from February 2021 with debt being the second largest advice category with 67,117 issues (behind Benefits and Tax Credits = 91,417). Debt calls were 10.4% up compared with February 2021 and represented 16.5% of all issues dealt with in the year to February 2022. The top 3 debt categories in February 2022 were fuel debts, council tax arrears and credit, store and charge card debts.

The report states that StepChange that 14,000 new clients received full debt advice in January 2022. The most common reasons for seeking debt advice were “lack of control over finances”, reduced income or benefits, unemployment or redundancy and an injury or health issue. 68% of clients had credit card debt, 50% had personal loan debt, 36% had an overdraft and 38% had catalogue debt. The majority of StepChange clients are female (64% in January 2022) and young (61% under the age of 40).

The headline says ‘UK Turns To Credit and Debt to Manage Cost of Living Crisis’.

Link: https://themoneycharity.org.uk/money-stats-march-2022-uk-turns-credit-debt-manage-cost-living-crisis/

MAT has also focused on usage of credit to makes ends meet. They have come off the back of the Bank of England Money and Credit figures showing consumer credit growth increased to 4.4% in February 2022 from 3.2% in January 2022. The annual growth rate of credit card borrowing was 9.4% with outstanding balances for consumer credit now standing at £199.5 billion.

Link: https://www.moneyadvicetrust.org/latest-news/one-in-four-using-credit-for-essentials-as-rise-in-consumer-credit-continues/

IPA response to new insolvency regulations

The IPA has responded to the government’s consultation on the future of insolvency regulations, as well as the 2021 Benchmark Report on the IPA Volume Provider Regulation Scheme.

Link: https://insolvency-practitioners.org.uk/news-and-notifications/  

MaPS – Driving forward change to support those in need

Caroline Siarkiewicz, MaPS CEO, has showcased the MaPS work to transform debt advice to help those most in need. She has reflected that the debt advice commissioning process is taking longer than they had hoped (see next topic). She knows that it is frustrating the bidders and advisers alike. She had confirmed the procurement of new services for national and business debt advice, and for 2 of the 3 DRO administration hubs.

MaPS continue to coordinate the UK Strategy for Financial Wellbeing which is intended to improve people’s relationship with their money and pensions throughout their lives.

QA framework for debt advice

From last Friday, MaPS will be aligning quality assurance testing to the FCA approved MaPS Standards and they will be providing guidance and tools to support partners in working towards compliance with these Standards. The new QA Framework will focus on assessing the suitability of advice against the MaPS Standards and the adequacy of the controls in place. They acknowledge that it will take some time to develop a new framework and will be working with key partners for the next 10 months to complete a “test & learn” phase and take further feedback on implementation. This phase will help identify gaps, opportunities for continuous improvement and reflect feedback and learnings gained through sector engagement. My fear is that this will be taken seriously by some (i.e. those subject to contracts and service level agreements in Lots 1, 3 and 4), but not others (see below).

It is important that the QA Framework takes account of the emerging technologies (e.g. Natural Language Processing) and equivalent QA approaches irrespective of channel, including mixed channel delivery (i.e. Omni-channel). Many of the providers on this bulletin have focused on how this is achieved consistently across channels to measure outcomes and identify customer journeys where this may not be the case. This is often more straightforward when you are the debt solution provider and can monitor customer progress well beyond the initial debt advice session.   

Link: https://moneyandpensionsservice.org.uk/2022/03/23/driving-forward-change-to-support-those-in-need/?cn-reloaded=1

MaPS report – Access to debt advice during COVID-19

Following their call for evidence on 28 September 2021 (‘Call for evidence on access to debt advice during the Covid-19 pandemic’), MaPS has published their findings (attached). The report can be downloaded from the link below. UK Challenge Group drove this activity, as they were concerned that the overall fall in demand for debt advice seen during the pandemic was partially driven by some vulnerable groups needing debt advice, but not being able to access it because of the closure of in-person services. As reflected in the DEMSA October 2021 ‘Hybrid-working bulletin’, MaPS want to draw on the lessons learned regarding how community debt advice services might be designed and delivered in future to reach and engage people in vulnerable circumstances, and to support funded debt advice agencies to put the right business continuity policies and procedures in place to manage system-wide disruption to services.

The report high-level findings reflect some of the challenges for the Lot1 (national) providers with regard to when to refer a customer to community debt advice. MaPS state that ‘in-person debt advice services’ delivered in community settings will continue to best meet the needs of some clients, particularly for those dealing with more complex problems. MaPS recognise that identifying who these clients are will require further research. In the interim, national providers will need to look at the complexity that may warrant effective transfers to local providers and report back on the outcome of these referrals under the wider MI reporting requirements. A similar challenge exists with regard to the extent of income optimisation activity on new debt advice sessions, where some may be significantly more complex than others.    

See also  Top 5 Trends to watch for Financial Organisations in 2022

Given the confrontational tone of the correspondence from ‘We Are Debt Advisers’, using the lessons learned as an opportunity for greater collaboration between advice providers to meet clients’ needs seems a long way off. There is some way to go in getting all stakeholders to recognise the importance of adapting to the wider ecosystem in which debt advice sits. This needs to include recognition that technology will play a greater role in building resilience and enabling more flexibility in the way debt advice services are delivered in the future. MaPS has stated that it is critical that services are modelled around retaining some elements of end-to-end remote advice for the foreseeable future. Indeed, these are fundamental principles in the statement-of-requirements for debt commissioning in terms of continuous improvement and inclusive design.

Unite has responded to the report. This includes urgent ‘demands’ (attached) on MaPS, which unfortunately reflects the tone that I have referenced above and don’t seem to reflect any of the wider government thinking that I referenced in the DWP review from November 2021 that we issued a Blog on in January 2022 when we thought that the MaPS awards would be announced. The nature of the demands still seems to ignore the requirements to meet emerging regulatory standards in terms of quality of debt advice and the ability to measure outcomes which are determined by the FCA. It appears that the FCA Consumer Duty hasn’t filtered down to individual community debt advisers as yet.      

Link: https://unitedebtadvicenetwork.org/2022/03/24/unite-debt-advice-network-responds-to-the-money-pensions-service-report-access-to-debt-advice-during-covid-19/

At a Social Value level, MaPS has recommended a sector-wide approach to supporting workforce wellbeing needs to be developed, particularly as hybrid-working evolves allowing a more diverse workforce and access to wider talent pools (potentially outside of the community boundaries). Use of best practices and specialist providers requires a more open-minded approach.

Anna Hall, Head of Money and Debt Operations at MaPS, has written the foreword. She reflects that the move to a digital-first model during the pandemic helped some organisations manage capacity and service availability more effectively. Investment in digital e-signature platforms and secure document transfer and storage solutions also made services easier to access and more convenient to use during the pandemic. She also acknowledges that responses from some individual debt advisers tended to be more negative compared to those submitted by debt advice organisations. These advisers found remote delivering of debt advice more complicated and time consuming, which negatively affected their wellbeing. For debt solution providers, the transformation to hybrid-working has presented a number of challenges that they have worked through from March 2020 and evolved governance frameworks accordingly. This is obviously a forward-looking activity as we prepare for the FCA Consumer Duty and any emerging risks of delivering poor customer outcomes.  

Aside from MaPS, we really do need to get more representatives from the community debt advice sector to attend events like the Credit Summit 2022 to listen to directors of our primary regulator and senior economists. They also need to listen to the direction of travel of mainstream and challenger credit granters, including those that used to be in home credit. I spend a lot of time horizon scanning around looking at what firms (that are not reliant on MaPS funding) need to consider to keep their business models fit-for-purpose in a rapidly evolving world where innovation, regulatory compliance and high-quality customer care are pre-requisites, which include the operational and financial resilience referred to above, where operating models can rapidly adapt to key risks materialising.       

Link: https://moneyandpensionsservice.org.uk/wp-content/uploads/2022/03/access_to_debt_advice_during_covid19.pdf – report link

Link: https://moneyandpensionsservice.org.uk/2022/03/24/access-to-debt-advice-during-covid-19-pandemic/?cn-reloaded=1

Digital engagement

I would like to welcome Rachel Curtis, CEO of Inicio AI, to the bulletin. Inicio AI featured in the Credit-Connect Lending Technology Think Tank event last week that Chris Warburton chaired. I am looking forward to catching up with Rachel next week. Their proposition is a next-generation conversational AI assistant. This transcribes I & E items from chat in real-time, answers questions and can fill in forms. We have a few natural language providers on the circulation. As always, how these tools and capabilities integrate into the overall service delivery framework is important where transactional (consumption based) costs associated with a debt advice or debt resolution session are critical by delivery channel.

Link: https://www.linkedin.com/posts/chriswarburton_it-is-a-wrap-some-great-topics-and-ideas-activity-6914563248167997441–5ba?utm_source=linkedin_share&utm_medium=member_desktop_web

Payment Systems Regulator (PSR) Annual Plan and Budget 2022/23

The PSR has issued a fact sheet to summarise the plan and budget for FY 2022/23. The PSR has reflected that the payments landscape is evolving and with this, there are issues that need to be addressed. These include the prevalence of Authorised Push Payment (APP) fraud, risks to effective competition and the need to support the payments sector to deliver new and improved services. They expect further challenges as global events impact the cost of living, which may affect what people need from payments to support their daily lives.

Their work programme for FY 2022/23 focuses on improving outcomes for everyone who uses payment systems so they are fit for the future.

Link: https://www.psr.org.uk/annualplan22-23/

FOS – Ombudsman News 170

FOS has published their plans and budget for FY 2022/23 following the consultation that closed at the end of January 2022.

The FCA recently confirmed the increase to the FOS award limits, which is the maximum amount FOS can require a financial services firm to pay when they uphold complaints. This limit is adjusted each year in line with inflation, as measured by CPI.

From 1 April 2022, award limits changed to:

  • £375,000 for complaints referred on or after 1 April 2022 about acts or omissions by firms on or after 1 April 2019
  • £170,000 for complaints referred to on or after 1 April 2022 about acts or omissions by firms before 1 April 2019

In 2022/23, the Financial Ombudsman:

  • Expects to receive 177,000 complaints and resolve 220,500 complaints
  • Continue to ensure it is equipped to respond to complexity and vulnerability in complaints
  • Invest in a change programme, which includes working with regulatory stakeholders to deliver their ‘Action Plan’

The 2022/23 budget includes:

  • A cost base of £291.7m
  • An individual case fee of £750
  • A compulsory jurisdiction levy expected to raise to £106m
  • A voluntary jurisdiction levy of £700,000
  • Businesses outside the group-account fee arrangement will get 3 free cases (reduced from 25)
  • Businesses in the group-account fee arrangement will get 15 free cases (reduced from 50)

Link: https://www.financial-ombudsman.org.uk/news-events/ombudsman-news-170

Link: https://www.financial-ombudsman.org.uk/news-events/financial-ombudsman-service-publishes-plans-budget-2022-23

The Betting and Gaming Council have joined the ICO Sandbox

Betting and Gaming Council. ICO Sandbox participant.

As the largest UK operators, Betting and Gaming Council (BGC) members Entain, William Hill, 888, Gamesys, bet365 and Flutter have agreed to trial a solution for the sharing of data sets from participating gambling operators. The BGC are committed to driving change and raising standards to prevent the impact of problem gambling which can have a significant impact on those affected.

The aim of the trial is to facilitate fast, proactive intervention and to prevent incidents of problem gambling. The proposed mechanism will ensure that if customers have multiple accounts with different operators, then the operators will be able to compliantly share data. This will allow them to identify and help manage problem gambling behaviour.

BGC will work with the ICO, with close engagement from the Gambling Commission on regulatory considerations, to understand the data protection considerations for a viable solution. They will look to identify the appropriate lawful basis for processing data and the safeguards required, particularly where that data is special category. BGC and participating operators are committed to ensuring the personal data of customers is used in a proportionate and appropriate way to identify harm and welcomes the opportunity to explore these issues with the expert steer of the ICO.

DEMSA covered the ‘Single Customer View’ in October 2021.

Link: https://ico.org.uk/for-organisations/regulatory-sandbox/current-projects#betting

Link: https://www.gamblingcommission.gov.uk/news/article/an-update-on-the-single-customer-view-industry-challenge

Events

I featured last week the CICM Credit Awards and IncomeMax winning an innovation award. I managed to catchup with Dan Woodhead, Partnership Director at IncomeMax, yesterday. I would like to welcome him to the Saturday bulletin. The link below covers the other winners.

Link: https://cicmbritishcreditawards.com/live/en/page/2022-winners

VRS – The Vulnerability Jigsaw’s Next Piece – ‘Identification, Integration, Implementation’

I had a really good response to the invite issued during the week for the next VRS webinar on 14 June 2022. I have copied Kirstie on this email in case anyone wants to get in touch directly.

Link: https://www.eventbrite.co.uk/e/the-vulnerability-jigsaws-next-piece-tickets-290293093457?aff=ebdssbonlinesearch


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