I’ve already written about the challenges in finding an effective regulator for the debt enforcement industry, but there has since been much more talk about the issue. In particular, I think it’s worth discussing some of the work the Civil Enforcement Association (CIVEA) has done to address and challenge the claims made in the ‘Taking Control’ report issued back in March.
The steps taken to bridge the gap between the debt enforcement and advice sectors could not only serve as the basis for a much more productive partnership in the long-term, but also illuminate exactly what role a regulator would need to play.
Questioning the urgency
The most concerning claim in ‘Taking Control’ was that enforcement-related complaints had risen since the introduction of new legislation in 2014. CIVEA rightly questioned the data behind this. It appears Citizens Advice may have been counting debt enquiries as complaints and citing unproven anecdotal evidence, which only serves to muddy the waters when it comes to assessing the impact of legislation and regulation. What’s more, the increase in enquiries is likely to have been affected by enforcement agencies’ own work to refer debtors to advice charities.
Nonetheless, I believe that the critique has led to a constructive dialogue and some useful analyses – not least CIVEA's own engagement with local authorities that revealed how 86% saw the number of ‘doorstep visits’ fall following introduction of the new legislation.
Understanding the need
Taking the time to gather these additional perspectives and clarifications provides us with the detail we need to understand where and how an independent regulator might be useful.
In fact, it's fair to say that any independent regulator’s remit should include such research, in order to ascertain exactly where the industry needs to be more stringently regulated to improve services for all concerned. After all, the FCA warning that consumer debt is a ticking timebomb not only shows the value of shared research, but provides a timely reminder of the urgency of getting this right.
Moving towards practical, evidence-based discussions will also help organisations identify their priorities. We might conclude, for example, that debt advice charities must be more clear and constructive in their criticism and that both sides must be open with their data on collection practices.
However, we have also seen how effectively CIVEA can get to the heart of the debate, and move it to more constructive ground. Given our current debate on regulators, the next question must therefore be: can CIVEA also regulate its members, or should it simply team up with members and outside stakeholders like advice charities to further refine the boundaries for regulation? The answer will guide us to whom might ultimately regulate the enforcement industry.
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