Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Upcoming SlideShare
What to Upload to SlideShare
Next
Download to read offline and view in fullscreen.

Share

How to find the right debt solution for everyone

Download to read offline

In today’s economic climate falling into debt is perilously easy, getting out is hard. Firms in the debt sector have adopted flexible and ethical collection practices to support families who are struggling, yet costs and the time taken to collect have increased.

This Policy in Practice webinar featured guest speakers Carole Kenney, Director, Welfare and Customer Care, Gareth McNab, Social Inclusion Lead, Nationwide Building Society who spoke alongside Zoe Charlesworth, Director of Policy and Operations, Policy in Practice, and Sarah Lambert, Affordability Assessment Manager, Policy in Practice.

Whether you’re a collection agency, utility company, advice organisation, local authority or housing association, you’re on the frontline for helping people in debt.

You can boost the financial resilience of households by helping them to increase their income. In this way, you can increase collection rates and social impact, in the knowledge that you’re doing the right thing.

In this webinar we discussed:

- How COVID-19 has already hit people’s incomes, and what’s in store
- Who the newly vulnerable households are
- How to reduce existing arrears and the chance of a customer falling into arrears
- How to minimise the cost of debt collection

For more information visit www.policyinpractice.co.uk, email hello@policyinpractice.co.uk or call 0330 088 9242

  • Be the first to like this

How to find the right debt solution for everyone

  1. 1. How to find the right debt solution for everyone Wednesday 11 November Policy in Practice webinar
  2. 2. Housekeeping www.policyinpractice.co.uk ● Audio check ● Please ask questions throughout ● Download, polls and a survey ● Aim to finish by 11:30 with optional 15 min demo ● Armistice Day observation at 11:00 ● Slides and recording will automatically follow ● Follow us on Twitter via @policy_practice
  3. 3. Today’s speakers www.policyinpractice.co.uk Zoe Charlesworth Director of Policy and Operations Policy in Practice @ZoeCharleswort1 Carole Kenney Director, Welfare and Customer Care CDER Group @CDERGroup Gareth McNab Social Innovation Lead Nationwide Building Society @McnabGareth Sarah Lambert Affordability Assessment Sales Manager Policy in Practice
  4. 4. www.policyinpractice.co.uk Give the best support you can to help people on their way policy software analytics
  5. 5. www.policyinpractice.co.uk A team of professionals with extensive knowledge of the welfare system. We’re passionate about making social policy work We help over 100 local authorities use their household level data to identify vulnerable households, target support and track their interventions Our benefit calculator engages over 10,000 people each day. We identify the steps people can take to increase their income, lower their costs and build their financial resilience Policy in Practice: What we do
  6. 6. Agenda www.policyinpractice.co.uk ● Our financial resilience before and after Covid-19, and in the future ● The main challenges facing the collections sector now, and in the future ● The main challenges facing the lending sector now, and in the future ● How to help people to build financial resilience ● Questions and answers ● Optional 15 min demo of the software shown
  7. 7. 777 Poll: At the start of 2020 what percentage of households didn’t have enough savings to live for a month without income? www.policyinpractice.co.uk
  8. 8. 888 Poll: How many households have missed a Council Tax payment during the pandemic? www.policyinpractice.co.uk
  9. 9. 999 Over to Zoe www.policyinpractice.co.uk
  10. 10. Pre-Covid financial resilience: many unprepared for income shock www.policyinpractice.co.uk At the start of 2020: ● 10% of households in the UK had no savings ● 30% of households had less than £600 savings ● Average household financial debt rose 9% to £9,400 in 2019 ● 44% of those in debt found it burdensome ● 41% of households don’t have enough savings to live for a month without income Sources: Global Banking and Finance, Gov.uk, Money Advice Service, ONS
  11. 11. Impact of Covid www.policyinpractice.co.uk ● 5.7m in receipt of Universal Credit (September 2020) - a 90% increase ● 2.7m people were unemployed and looking for work, 117% increase since March 2020 (August 2020) ● 7.5 m furloughed workers (August 2020) ● 800,000 job losses since Feb 2020 (latest estimate of 2m by April 2021) Increase in debt ● 6 million adults across the UK have fallen behind on at least one bill during the pandemic ● 2.8 million households have missed a council tax payment Sources: ONS, OBR, DWP, Citizens Advice
  12. 12. Unemployment caused by a few factors www.policyinpractice.co.uk
  13. 13. The second safety net www.policyinpractice.co.uk The welfare support system has its own welfare support system Welfare benefits are insufficient for many households Risk factors: ● Tenant ● Children ● Previous debt Foodbanks project a 150% rise in 2020/21 (Source: HoC briefing Nov 20)
  14. 14. Support measures www.policyinpractice.co.uk ● Coronavirus Job Retention Scheme (furlough scheme) ○ Up to 80% of wages (up to £2,500) until the end of March 2021. ○ Must be on PAYE payroll on 30 October 2020. Ex-employees on the payroll on 23 Sept 2020 can be re-employed and furloughed ● Self employed grant is to be extended ○ 3 months from Nov 2020 to Jan 2021 with a further grant from Feb - April ○ 80% of trading profits (up to £2500/month) ● MIF suspension extended to end April 2021 ● Further grants for businesses ● Payment holidays (up to a total of 6 months) ● Eviction protections ● Benefit increases; LHA to 30 percentile, MIF suspension, £20 uplift ● £170m to councils to provide Christmas support with bills
  15. 15. Many people fall through the gaps www.policyinpractice.co.uk ● Employed and self-employed not eligible for support schemes ● Households not eligible for UC ○ partner’s income ○ over £16,000 capital ○ No Recourse to Public Funds ○ students ● Those that do not benefit from Covid benefit uplift ○ legacy benefits and should not move ○ benefit capped
  16. 16. Interaction of poverty and collection rates www.policyinpractice.co.uk Poverty Local authorities with higher levels of relative deprivation tended to report lower council tax collection rates
  17. 17. More uncertainty on its way www.policyinpractice.co.uk Forthcoming changes ● 10% of furloughed workers likely to be made redundant (OBR); with second lock-down this may increase ● Emergency benefit increases to end in April 2021 ● Brexit
  18. 18. Support is available www.policyinpractice.co.uk/coronavirus
  19. 19. 191919 Carole Kenney Director, Welfare and Customer Care CDER President, CIVEA www.policyinpractice.co.uk
  20. 20. In Operation Fairness How to find the right debt solutionfor everyone – 11th November 2020 Carole Kenney Director Welfare & Customer Care President, CIVEA
  21. 21. 21 Civil Enforcement • CIVEA represents 95% of the industry, 33 enforcement agencies and 2000 enforcement agents • CIVEA members collect over £550m per year at no cost to the public purse • Debts past to enforcement agencies are largely debts owed to local or central government which have already been to court and a warrant obtained (council tax, business rates, parking fines, magistrates court fines) • During the compliance stage of the process enforcement agencies are utilising the same collection strategies, technology and data sources as private debt collection agencies. • Over 50% of cases passed to an enforcement agent are collected at this stage and without the need for a doorstep visit. • 64% of council tax cases passed to enforcement agents were resolved via a repayment plan. The Local Government Association has warned Local Authority’s face a £7.4bn shortfall in funding due to impact of Covid-19 on council revenue “65% of adults believe local services, such as social care, would be put at risk if fewer people paid their council tax” YouGov survey August 2020
  22. 22. 22 Main challenges for enforcement and collections sector 1. The collection of debt is considered unfair during a global pandemic? 2. Customer engagement remains low – negative perception of creditors and collections agencies. 3. The number of customers facing financial volatility expected to increase significantly – a new type of debtor “13 million people in the UK lack any savings to fall back on should they suffer a 25% cut in income” (source: Financial Inclusion Commission)
  23. 23. 23 FAIRNESS FRAMEWORK Purpose: to define a new framework to embed “Fairness” in everything we do This framework is intended to demonstrate the values and principles we uphold, together with the working practices we ensure we undertake, in all of our engagements with clients, customers (debtors) and employees – setting the standard as a responsible operator in the collections and enforcement industry. Charter Our declaration of principles and practices that embody how we promise to treat everyone “Fairly” Framework Our structured model ensures Fairness is pervasive and considered at every touchpoint
  24. 24. Fairness Charter May 2020 V0.1
  25. 25. We will remember them
  26. 26. 26 FAIRNESS & VULNERABILITY We work hard to identify and differentiate the approach taken between those customers who cannot pay their debt due to vulnerability or hardship; those who are in a position to pay their debt but may need time and support to do so; and those who have the means to pay their debt, but choose not to. The collection of public debt must be fair and proportionate and we cannot ignore the impact Covid has had on people’s finances or mental wellbeing. Balancing the collection of unpaid taxes and fines and the ability of the customer to repay is crucial to the implementation of our fairness strategy. Analytics prove that debt which is allowed to stagnate becomes more difficult to collect and is less fair on the customer. Fluid engagement will achieve a more successful outcome and understanding an individual’s circumstances and providing them with the opportunity to repay via a plan which is affordable and sustainable is more likely to result in full payment and future compliance. Equally, identifying vulnerability and the need for reasonable adjustments or support early in the process leads to a better outcome for the customer and creditor.
  27. 27. 27 Vulnerability Strategy Defined principles for identifying and supporting vulnerable customers Fairness must be embedded at the heart of the organisation and touch every aspect of the business. It is not OK to just say it – we must live it, breathe it, deliver fairness in operation and challenge ourselves regularly through independent scrutiny. CDER meet the Customer Service Excellence Standard and were awarded 12 compliance plus marks for the Fairness Framework and our commitment to delivering effective recovery of public debt whilst supporting vulnerable individuals.
  28. 28. 28 Supporting Financial Vulnerability Core Principles – Affordability, Flexibility, Independent Debt Advice
  29. 29. 29 Case Study: Alexandra Council Tax Due • Council Tax Bill, instalments agreed • 2 Missed instalments – 2 x reminder letters • Summons, Liability Order granted by Magistrates • 14 day letter issued advising enforcement agents will be instructed Compliance Stage • Notice of Enforcement issued • Telephone number obtained through standard search • 3 x outbound calls & 3 x SMS sent • Compliance letter issued including Welfare information and signposting • Pre enforcement letter issued Enforcement Stage • EA visit, no response • EA receives call from customer who agrees to lump sum payment £399 and £100 per month repayment plan to clear by end of tax year. Welfare Stage • Customer calls crying and apologising for not dealing with this sooner but the payment she made to the EA left her with £1 in her bank account and now she has no money for food. • She is transferred to Welfare team who arrange immediate FAST payment refund, place her case on hold and schedule a video call for the following week to carry out affordability assessment. • The affordability assessment is carried out using BBC which identifies eligibility for working tax credits, SPD and an action plan agreed to review utility provider. • Alexandra recently went through a relationship breakdown and is a single parent on low income. She was embarrassed and afraid to ask for help. A temporary repayment plan was agreed until March when it will decrease to enable payment of ongoing liabilities. “Dear Emma, Thank you so much for your support. In this difficult climate, you have reassured me and truly made a positive difference to my life. In line with a lot of the country, money is especially tight at the moment as I am supporting my parents who are shielding. I promise to contact you immediately if I have any issues making my payments. Thank you so so much, Alex”
  30. 30. 30 Action 1. Remove the stigma of debt and the perception of collections 2. Continue to improve customer engagement 1. Embed robust framework and policies for assessing affordability 1. Empower staff to “do the right thing” and be flexible with resolutions
  31. 31. © CDER Group Limited 2020. All rights reserved. The contents of this document are confidential to CDER Group Limited. It contains information which constitutes CDER Group’s trade secrets. The company or organisation to which this document is addressed must not use or disclose those contents to anyone except in accordance with any non- disclosure agreement entered into between CDER Group Limited and that company or organisation. Carole Kenney Director, Welfare & Customer Care President, CIVEA carole.kenney@cdergroup.co.uk 07710 096 634
  32. 32. 323232 Poll: How would you rate your knowledge of the welfare system? www.policyinpractice.co.uk
  33. 33. 333333 Gareth McNab Social Innovation Lead Nationwide Building Society gareth.mcnab@nationwide.co.uk www.policyinpractice.co.uk
  34. 34. Lending sector challenges www.policyinpractice.co.uk Three challenges facing the lending sector in a mid / post-Covid world 1. Loan origination: Who do you lend to, and how? 2. Product design: How do you build products that better fit real life, cradle to grave? 3. Service design: How do you make most benefit of moments of truth, and in whose interest?
  35. 35. Tool we use www.policyinpractice.co.uk Policy in Practice’s Benefit and Budgeting Calculator 1. Budget: ONS comparables 2. Benefits: smooth journey and helpful outputs 3. Beginnings: standalone information is good, but building momentum towards action is better
  36. 36. 363636 Over to Sarah www.policyinpractice.co.uk
  37. 37. How to engage customers earlier www.policyinpractice.co.uk Many people will need support from the welfare system for the first time and won't know what they can claim or how People don't have to be experts to have confidence they are receiving accurate guidance. With so many support schemes available customers are empowered and have increased confidence Reduce poverty, increase financial resilience and avoid detrimental mental health caused by financial uncertainty
  38. 38. Complete an affordability assessment www.policyinpractice.co.uk Complete affordability assessments via the industry standard financial statement Ensuring consistency for people when gathering their income and expenditure information Save, print and download results allowing your customers and clients to share their assessment with other creditors. Meeting the requirements of data portability under GDPR and guidance from regulators
  39. 39. Give support with budgeting www.policyinpractice.co.uk Access cost of living data to help people find ways they may be able to reduce their costs Understand the full picture of your customers and client’s circumstances
  40. 40. How to improve financial resilience www.policyinpractice.co.uk Fluctuating income makes budgeting very difficult Unstable income from work causes fluctuations in UC payments People can understand how changes in employment will affect them financially
  41. 41. 414141 Questions and answers www.policyinpractice.co.uk
  42. 42. ● Benefit and Budgeting Calculator ● For up to date information on the welfare support available see www.policyinpractice.co.uk/coronavirus ● Download our new product brochure ● Follow up email with webinar recording and slides, with links ● Short survey to follow now ● Send us your stories about the benefit cap to hello@policyinpractice.co.uk ● Next webinar: ○ Wed 9 Dec: 2020: A policy review of the year, and look forward to 2021 Practical tools that can help www.policyinpractice.co.uk/events
  43. 43. 434343 Poll: Join us for a look at the software in more detail www.policyinpractice.co.uk
  44. 44. 444444 Over to Sarah for a quick look at the software www.policyinpractice.co.uk
  45. 45. 454545 Thank you Carole Kenney, CDER Group and CIVEA Gareth McNab, Nationwide Building Society Zoe Charlesworth, Policy in Practice Sarah Lambert, Policy in Practice hello@policyinpractice.co.uk 0330 088 9242 www.policyinpractice.co.uk

In today’s economic climate falling into debt is perilously easy, getting out is hard. Firms in the debt sector have adopted flexible and ethical collection practices to support families who are struggling, yet costs and the time taken to collect have increased. This Policy in Practice webinar featured guest speakers Carole Kenney, Director, Welfare and Customer Care, Gareth McNab, Social Inclusion Lead, Nationwide Building Society who spoke alongside Zoe Charlesworth, Director of Policy and Operations, Policy in Practice, and Sarah Lambert, Affordability Assessment Manager, Policy in Practice. Whether you’re a collection agency, utility company, advice organisation, local authority or housing association, you’re on the frontline for helping people in debt. You can boost the financial resilience of households by helping them to increase their income. In this way, you can increase collection rates and social impact, in the knowledge that you’re doing the right thing. In this webinar we discussed: - How COVID-19 has already hit people’s incomes, and what’s in store - Who the newly vulnerable households are - How to reduce existing arrears and the chance of a customer falling into arrears - How to minimise the cost of debt collection For more information visit www.policyinpractice.co.uk, email hello@policyinpractice.co.uk or call 0330 088 9242

Views

Total views

111

On Slideshare

0

From embeds

0

Number of embeds

0

Actions

Downloads

1

Shares

0

Comments

0

Likes

0

×