KEY THEMES+ ¦ DEMSA Summary

What you need to know this week

  • FCA growth-challenge measures could make contactless spend thresholds discretionary; past increases (2007 £10 → 2020 £45 → Oct 2021 £100) correlated with higher average contactless spend.
  • ONS: zero GDP growth in July 2025 (after +0.4% in June 2025).
  • Resolution Foundation: essentials and energy debt have risen sharply; energy debt has tripled in a decade.
  • StepChange: over two in five clients are in energy arrears; average energy arrears ~£2,300; average council tax arrears ~£2,000.
  • Warm Home Discount now requires evidence of income below £36,000 a year (documentary income checks).
  • Water sector: complaints to water companies fell by 8% (to 205,853) while complaints escalated to CCW rose by 3% (to 8,235); affordability complaints +110%, bill increase complaints +138%.
  • Companies House identity verification for directors/PSCs becomes mandatory from 18 November 2025 (Economic Crime & Corporate Transparency Act 2023).
  • FCA: Scott & Mears Credit Services entered administration on 2 September 2025; customers and DMP providers advised to cancel standing orders and liaise with creditors.
  • FCA launches £1m campaign on motor finance compensation awareness; 79% of motor finance customers aware they may be owed compensation; 46% of claimants used a CMC or law firm.
  • Authorisation/registration: FCA highlights common weaknesses (over-reliance on consultants, unclear role time allocation, misaligned policies, inadequate IT/control scenarios).
  • Scottish statutory debt solutions (AiB): 7,403 personal insolvencies in 2024/25 (−8.4% y/y); DAS DPP approvals 5,292 in 2024/25; three-year survival rates rising from 66% (2015–16 cohort) to 69% (2020–21 cohort).
  • Events: FourNet — 17 Sep 2025, Treehouse, Manchester (author speaking); DEMSA webinar — 25 Sep 2025 (webinar); One Voice on Affordability — 9 Oct 2025, Edwardian Hotel, Manchester.

Key Themes

Regulatory and macro environment link link

  • Description: recent macro indicators and regulatory pronouncements shaping firm strategy.
  • Items: ONS GDP (July 2025 zero growth), FCA guidance on authorisation and registration, FourNet blog on regulatory pressure reshaping customer journeys.
  • Why important: GDP stagnation and shifting regulatory expectations directly affect credit demand, provisioning assumptions, operational compliance costs and the prioritisation of risk controls within financial services and debt management operations.

Household affordability and essentials link, link

  • Description: rising cost of essentials, growing priority-bill arrears, and shifts in household resilience.
  • Items: energy debt tripled over a decade; arrears increasing across income distribution; Resolution Foundation analysis.
  • Why important: higher prevalence and severity of priority-bill arrears increases collection risk, affects segmentation and affordability-assessment models, and requires firms to adjust forborne-treatment frameworks and loss forecasts.
See also  KEY THEMES+ ¦ DEMSA Newsletter

Utilities, energy debt and sector partnerships link, link

  • Description: provider-level arrears, complaint dynamics and expanded referral partnerships to support customers.
  • Items: British Gas–StepChange extension (additional ~18,000 customers from Oct 2025), MEGA.AI event coverage, evidence of ~1m electricity and ~1m gas customers behind on bills.
  • Why important: utilities are primary creditors for priority bills; stronger referral pathways and partnership programmes materially reduce escalation risk and can improve operational outcomes for collectors and advisers handling vulnerable customers.

Customer protection, complaint resolution and sector scrutiny link

  • Description: complaint volumes, escalation to watchdogs and transparency measures.
  • Items: company complaints down 8% but CCW escalations at 9-year high; affordability and bill-increase complaints spiking. CCW to publish company-level complaint assessments in 2025–26.
  • Why important: rising escalations and regulatory transparency measures increase reputational and operational risk for firms; robust first-contact resolution and MI are critical to reduce regulatory scrutiny and potential interventions.

Financial crime and identity verification link, link, link

  • Description: FCA prioritisation of AML, enforcement signals, and Companies House identity-verification reforms.
  • Items: FCA enforcement where AML controls were inadequate, Companies House mandatory ID verification for directors/PSCs from 18 Nov 2025.
  • Why important: stronger AML expectations and corporate ID requirements increase customer onboarding friction and compliance costs; firms must adapt KYC/identity flows and SMF/SM&CR training to mitigate regulatory and operational risk.

Firm readiness for authorisation and conduct frameworks link

  • Description: FCA good/poor practice guidance for authorisation and registration applications.
  • Items: expectations on staff competence, tailored policies, aligned frameworks and IT/control articulation; common weaknesses flagged.
  • Why important: firms seeking authorisation or maintaining regulated activities need to align governance, staffing and control evidence with expectations to avoid delays, remediation costs and potential refusals.

Redress mechanisms and consumer claims link

  • Description: FCA awareness campaign on motor finance compensation and implications for claims handling.
  • Items: high consumer awareness of potential compensation; substantial use of CMCs/law firms among claimants.
  • Why important: expected inflows of redress claims require creditors and advisors to coordinate notification and insolvency treatment strategies; operationalising claims at scale will affect collections workflows and IVA considerations.
See also  KEY THEMES+ ¦ DEMSA Summary

Insolvency, DPP/DAS performance and recovery outcomes link, link

  • Description: Scottish statutory debt solution trends and cohort outcomes (DPP/DAS metrics).
  • Items: 7,403 personal insolvencies in 2024–25, DAS DPP approvals and completions and improving survival rates across cohorts.
  • Why important: DPP and insolvency performance informs expected recovery rates, product sustainability assessments and portfolio strategy for firms managing long-tail DMP books and statutory remedy comparisons.

Firm failures and market disruption link

  • Description: recent firm administration and practical implications for payment routing and creditor communication.
  • Items: Scott & Mears Credit Services entered administration (2 Sep 2025); administrators advising customers to cancel standing orders and contact creditors.
  • Why important: firm failures create immediate servicing risks, payment re-routing needs and increased dispute/complaint volumes for creditors and DMP administrators; contingency planning and creditor liaison protocols are essential.

Events, industry engagement and knowledge transfer link, link

  • Description: scheduled workshops, webinars and conferences presenting operational and regulatory topics.
  • Items: FourNet, Treehouse — 17 Sep 2025, Manchester (author speaking); DEMSA webinar — 25 Sep 2025 (webinar); One Voice on Affordability — 9 Oct 2025, Edwardian Hotel, Manchester.
  • Why important: events provide targeted forums to review regulation-to-practice translation, share MI and operational approaches for vulnerability handling and affordability across utilities and collections functions.

Key Statistics

  • ONS: 0.0% GDP growth in July 2025 (after +0.4% in June 2025).
  • Trading businesses early-September 2025: top challenges — economic uncertainty 28%, competition 23%, labour costs 18%; 21% considering price rises due to labour costs in October 2025.
  • Resolution Foundation: energy debt has tripled in a decade; approximately 1 in 10 middle-income households now behind on a priority bill (up from <1 in 20 a decade ago).
  • StepChange: >40% of clients in energy arrears; average energy arrears ~£2,300; average council tax arrears >£2,000.
  • Utilities arrears: ~1,000,000 electricity customers and ~1,000,000 gas customers behind on bills; average electricity debt rose from ~£500 (2012) to ~£1,600 (2024); average gas debt rose from ~£500 to ~1,400.
  • Water sector complaints: company-level complaints fell 8% (222,956 → 205,853); CCW escalations +3% (7,977 → 8,235). Affordability complaints +110%; bill increase complaints +138%; stage 2 complaints down 23%.
  • Companies House ID verification mandatory from 18 November 2025 (Economic Crime & Corporate Transparency Act 2023).
  • Scott & Mears Credit Services entered administration on 2 September 2025.
  • FCA motor finance research: 79% of customers aware they may be owed compensation; 61% aware of a possible compensation scheme; among those aware, 25% have made a claim and 39% intend to; 46% of claimants used a CMC or law firm.
  • Scottish statutory remedies: 7,403 personal insolvencies in 2024–25 (−8.4% y/y); bankruptcies 2,483 (−0.5%); PTDs 4,920 (−11.9%); DAS DPPs approved 5,292 (2024–25); DPP completions 2,145 (+17.5%); DPP revocations 1,809 (+12.9%).
  • AiB Q1 2025–26: 1,400 DPPs approved in Q1 (up 1.7% vs Q1 2024–25).
  • Insolvency cohort survival: three-year survival improved from 66% (2015–16 cohort) to 69% (2020–21 cohort).
See also  KEY THEMES+ ¦ DEMSA Summary

Newsletter Contents

  • Macro snapshot: July 2025 GDP flat; business sentiment and near-term pricing pressures.
  • Essentials pressure: Resolution Foundation report on energy and priority-bill arrears.
  • StepChange statistics and commentary on energy and council tax arrears.
  • Warm Home Discount: new documentary income checks and £36,000 threshold.
  • Water sector: company complaints fell but CCW escalations hit a nine-year high; affordability complaints surged.
  • Companies House: mandatory identity verification for directors/PSCs from 18 Nov 2025.
  • FCA guidance: common weaknesses in authorisation/registration applications and good practice expectations.
  • Scott & Mears: administration notice (2 Sep 2025) and creditor liaison instructions.
  • FCA motor finance campaign: £1m awareness activity; consumer claim dynamics and CMC usage.
  • Financial crime: FCA enforcement emphasises AML system adequacy; need for KYC and inter-agency collaboration.
  • Scottish statutory debt solutions: AiB annual statistics and DPP/DAS performance metrics.
  • Events calendar: FourNet (17 Sep 2025, Treehouse, Manchester), DEMSA webinar (25 Sep 2025, webinar), One Voice on Affordability (9 Oct 2025, Edwardian Hotel, Manchester).

Find the full DEMSA newsletter, commentary and links here

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