Insights ¦ Consultation on ECB Standards for Enforcement Work – vulnerability and ability to pay

Key Take Aways

• The ECB has launched a comprehensive consultation on new standards for enforcement work, with a focus on vulnerability and ability to pay, reflecting advancements since the 2014 National Standards.
• The primary mission of the ECB is to ensure fairness and prevent adverse outcomes for individuals experiencing enforcement actions, particularly those in vulnerable circumstances.
• The draft standards adopt an outcomes-focused, ‘define, identify, respond’ approach, emphasizing organisational responsibility, proactive identification, and tailored response to vulnerability and ability to pay.
• A shift in sector culture is advocated, moving from a reactive stance to a ‘vulnerability first’ mindset, promoting a more nuanced and compassionate approach across enforcement processes.
• The standards recognise vulnerability as fluid, individualised, and potentially transient, driven by four key factors: health, life events, resilience, and capability.
• There is an emphasis on systemic organisational policies, including training, governance, and record-keeping, to embed vulnerability considerations into enforcement activity.
• Standards for enforcement agents and firms explicitly require early identification, respectful engagement, and appropriate responses, including cease or pause enforcement in cases of acute vulnerability.
• The proposed definitions differentiate between vulnerability and potential vulnerability, underscoring the importance of ongoing evaluation and case-by-case judgement.
• The standards highlight the role of creditors, encouraging early information sharing and collaboration to support vulnerable debtors effectively, even though the ECB’s standards currently do not directly apply to creditors.
• The development process has involved extensive stakeholder engagement, including workshops with debt advisers, enforcement firms, and vulnerable individuals, alongside independent research.
• Implementation is designed to be phased, with a target for full operationalisation by October 2026, allowing firms time to adapt policies, upskill staff, and embed new practices.
• The consultation invites broad feedback, especially on definitions, practical implications, and cost impact, aiming to refine standards before final publication.

Key Statistics

• Over 40 enforcement firms accredited by the ECB represent over 96% of the debt enforcement market under the Taking Control of Goods Regulations.
• 24% of UK households projected to struggle with rising costs by the end of 2025.
• 13.1 million adults (24%) in the UK are estimated to have low financial resilience.
• 49% of adults display characteristics of vulnerability, with 73% of debt advice clients in enforcement experiencing mental health issues.
• 61% of individuals experiencing enforcement in the first half of 2024 had vulnerabilities beyond financial status.

Key Discussion Points

• The urgency for updated standards on vulnerability and ability to pay, reflecting wider social and sectoral progress since 2014.
• Adoption of an outcomes-driven, risk-based approach to managing vulnerability, rather than a prescriptive or tick-box model.
• The importance of fostering a ‘vulnerability first’ organisational culture, integrating policies into core business practices.
• Emphasising the fluid and dynamic nature of vulnerability, requiring continuous case-by-case evaluation.
• The role of enforcement firms in developing tailored support strategies that go beyond technical compliance.
• The critical influence of creditor engagement and information sharing at early stages in the enforcement process.
• The need for tailored responses, including adaptations to enforcement activity or referral to specialised support for vulnerable individuals.
• Recognising third-party vulnerabilities and the application’s extension to interactions involving household members or active third-party engagement.
• The standards’ alignment with recent Ministry of Justice consultation outcomes, especially on sanctions, fee structures, and debt recovery protocols.
• The emphasis on learning, continuous improvement, and outcome audits within enforcement firms to refine vulnerability responses.
• The phased implementation plan is designed to allow considerable organisational and operational adjustments, with a full rollout expected by October 2026.
• The consultation process, open until October 31, 2024, seeks stakeholder feedback on definitions, practical implications, and impact assessment.

Document Description

This article presents a detailed consultation paper issued by the Enforcement Conduct Board (ECB) outlining proposed standards for the enforcement sector, specifically targeting vulnerability and ability to pay. It elaborates on a shift towards a more compassionate, tailored enforcement approach—emphasising proactive identification, respectful engagement, and customised responses. The document highlights the context, principles, and operational frameworks needed for enforcement firms and agents to meet these new standards, integrating comprehensive definitions, organisational policies, and practical actions. Stakeholders are invited to review, comment, and shape these standards — aimed for full implementation by October 2026 — ensuring fairer outcomes for vulnerable debtors within the enforcement landscape.