By Kate Brown
Public sector bodies have been called to change the way they recoup debts after the Treasury Select Committee reported debts and overpayments are pursued “over-zealously and uncompromisingly” by councils. The current approach of collecting debts from hard-pressed families can typically leave them in a more vulnerable and difficult position. Citizens Advice head of policy, Matt Upton, stated that people can see a relatively small amount of debt spiral once debt collectors create additional charges and fees.
Chief executive of Citizens Advice, Gillian Guy, said that reforms in 2014 were introduced with the aim of protecting vulnerable people from unfair practices, including the way bailiffs collect debt. However, Mr. Guy also commented: “It is clear these changes have failed. Citizens Advice has seen a more than 25% rise in bailiff problems since 2014 and helped 42,000 people with 98,000 issues last year.”
In order to protect consumers from unfair practice, a petition for an independent regulator has been put forward. The HM Treasury set up the Fairness Group who work to improve how debt is collected.
Bank overdraft fees can cost borrowers up to seven times more than payday lenders
UK government borrowing has fallen to its lowest annual level in 11 years
UK households are more likely to borrow than save