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Loans & Credit

Moves afoot to put paid to UK's aggressive debt collectors

Government plans to tighten up debt-enforcement rules, says Neasa MacErlean

We can all expect to hear more about bailiffs in the next few months. The Ministry of Justice is planning to reform parts of the  700-year-old framework governing these debt-enforcement officers and the 4 million court orders and warrants they enforce each year. And, concerned about the aggressive behaviour of many bailiffs, Citizens Advice is just launching a campaign to help the public protect itself.

On the Wednesday after next, Citizens Advice is briefing MPs through the All Party Parliamentary Group on debt and personal finance, about the need to introduce tougher controls than the Government appears to be preparing.

Council tax debt problems

More of us are coming into contact with bailiffs. There is a “big increase” in their use, according to National Debtline. This is correlated to the rise in council tax debt problems, as more people have difficulty paying their liabilities – and local authorities, facing their own financial pressures, take bigger steps to chase unpaid bills. The proportion of National Debtline callers who have council tax debts has risen from 8 to 20 per cent in the past eight years. New kinds of debt are also developing. For instance, Transport for London issued instructions to bailiffs 117,000 times in the year to September to chase unpaid congestion charges – although it uses bailiffs  only as a “ very last resort”.

The Local Government Ombudsman does not keep statistics on complaints over bailiffs – but three of the past 10 Ombudsman decisions that appear under the heading “local taxation” refer to bailiffs and they make worrying reading.

Slough Borough Council featured twice. In one case a vulnerable, female, who had recently been treated for cancer and was dependent on social services, hid in a park all day as bailiffs tried to enter her house.

The Ombudsman ordered that her council tax debt should be written off and that she should be given an extra £250.

In the second Slough case, a bailiff seized a doormat and charged a man, who had outstanding council tax bills, £230 for the visit and seizure.

Shocking tricks

Advice worker John Kruse, author of Bailiffs: The Law and Your Rights, had been hoping to see reform of the laws a decade ago.

“The case law dates back to the 14th century and the statute law to the 13th century,” he says.

“I’m concerned about the way all private bailiffs work. They are under a lot of pressure to produce a decent profit, and the only way to do that is by squeezing the maximum amount of money out of people in debt.”

He says that there are fewer shocking tricks – like the bailiff gaining entry by climbing in an open window or a skylight – and more, like charging too much and seizing items they should not take, which are “more subtle”.

For instance, bailiffs are supposed to ignore basic furniture and vehicles which do not belong to the debtor – but Mr Kruse has frequently seen them adding such items.

In the end, he and Citizens Advice, along with other campaigners, have all but lost hope that the Government will introduce a new regulator for the industry.

The Ministry of Justice is now working on introducing some reforms, with more information coming out on this in the next few weeks and some changes being initiated in 2013. 

In its consultation paper, Transforming bailiff action, in May, the Ministry of Justice accepted that the present law is “complex, unclear and confusing”, resulting in bailiffs “misrepresenting their legal authority”. The aim of the proposed reforms was stated in a way which accepted some of the current problems – “how we will provide more protection against aggressive bailiffs and encourage more flexibility in bailiff collections”.

Citizens Advice is also going to work harder to promote its code, “Collection of Council Tax arrears good practice protocol”, among local authorities.

Better deal

So, whatever happens, people with debts are best advised to inform themselves of their rights if they think a bailiff might call. “Generally, people are better off not allowing the bailiffs access,” says Mr Kruse.

“They are better off sitting it out if they can because, ultimately, the debt will go back to the creditor. You may well get a better deal with the creditor, depending on the debt.”

If bailiffs are let in once for collecting other debts, they can insist on returning – so it is particularly important not to give them access at all. In certain situations – collecting unpaid fines, income tax or VAT – bailiffs can require entry to your property, whether you invite them in or not.

The best move for debtors is to negotiate with their creditors and prevent the need for bailiffs being sent out. But if bailiffs do arrive there are several sources of help (see case study, above right).

The debtor can also contact the Ombudsman after first complaining to the bailiff or the creditor.

There is also CIVEA, the Civil Enforcement Association, which handles complaints for the industry and acts as a regulator for the 1,800 bailiffs employed by its member companies. CIVEA dealt with 105 complaints in the last year, upholding them in 19 per cent  of cases.

Since an independent regulator looks unlikely, CIVEA is likely to retain its current role.

Its director general, Dr Steven Everson, told The Independent: “Though the advice sector would much prefer that the industry were regulated by an independent regulator, they fail to identify the funding for such an expensive structure.

“The only source of income for enforcement companies is from the fees and charges made against debtors, and therefore, if the industry was required to pay for the regulator, ipso facto there would need to be a commensurate increase in the level of fees and charges.

There is no enthusiasm from the Government, particularly in the current economic situation, to fund such a venture. “In the absence of such an independent body, the industry is left to deal with complaints within its own resources.”

With some bailiffs still behaving so outrageously, it is somewhat surprising that the issue has not already attracted more publicity  and censure.

However, this may change, particularly since the Government is currently considering putting up the statutory fees for bailiffs so that a straightforward visit might cost £230 in future. At the moment, the fee can be just £24.50.

Case Study

I feared bailiff would find me in bed

National Debtline adviser Laura Wale helps those who have been visited by a bailiff. “I spoke to a woman who was upset because the bailiff had knocked at her door at a quarter to eight,” she says. “She owed £400 in Council Tax and was upset that he might have come in when she was in bed. I explained that wasn’t so.”

A bailiff collecting Council Tax could call as early as 6am but may not force an entry for this kind of liability. In this case, the woman did not let the bailiff in which gave her a better bargaining position, Ms Wale says. If she had let him in, he would have listed her property and — barring a few basics — returned to seize and sell them if she had not agreed to and fulfilled the payment offer he made her. Instead, Ms Wale advised the woman to write to the bailiff and local council, offering monthly payments of between £5 and £10, as she was on benefits. “We don’t encourage people to call bailiffs or deal with them face-to-face,” says Ms Wale, because they can take fright and agree to more than they can afford.

Useful contacts and websites:

* Citizens Advice - Collection of Council Tax arrears good practice protocol: www.citizensadvice.org.uk/print/council-tax-arrears;

* Guide on bailiffs: www.adviceguide.org.uk/england/debt_e/debt_action_your_creditor_can_take_e/debt_bailiffs_e.htm

* Civil Enforcement Association: www.civea.co.uk

* Government website: www.gov.uk/your-rights-bailiffs/what-you-can-do-when-a-bailiff-visits

* Local Government Ombudsman: www.lgo.org.uk; 0300 061 0614

* National Debtline: www.nationaldebtline.co.uk/england_wales/factsheet.php?page=02_bailiffs_and_council_tax; helpline 0808 808 4000

* Northern Ireland Ombudsman: www.ni-ombudsman.org.uk; 02890 233821

* Public Services Ombudsman for Wales: www.ombudsman-wales.org.uk; 0845 601 0987

* Scottish Public Services  Ombudsman: www.spso.org.uk; 0800 377 7330