MPs speak out on financial vulnerability

The VRS welcomes a report published last week by the Treasury Select Committee on their inquiry into consumers’ access to financial services. We were deeply encouraged to see that the Select Committee’s findings align so closely with the aims and motivations of the VRS, with the Select Committee concluding that financial services providers ‘should offer customers the opportunity to exclude themselves either from borrowing altogether or from spending excessive sums of money in short spaces of time’.

During the inquiry they had heard from consumer bodies, charities, financial service providers and statutory bodies. A key part of the report looked into the definition of vulnerability and the duty of care towards them.

Evidence from the Money and Mental Health Policy Institute demonstrated just how crucial a service such as the one the VRS provides is, describing how they have come across people having to put their credit cards in water in the freezer in order to prevent them from using it.

The report calls on UK Finance to work with financial services providers to find ways to increase the variety of self-exclusion spending and lending blocks available to consumers. The VRS will continue to engage with UK Finance, organisations and regulators to support the achievement of this aim.

The report can be read in full here

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VRS wins Credit Information Provider of the Year award

A quote given out during the awards suggests that “Taken forward well, this initiative can become a standard part of data offerings across the credit bureau

The important work that the VRS is doing to protect and support financially vulnerable consumers was recognised last night when it was a winner in the prestigious Credit Awards 2019, in the category of Credit Information Provider of the Year.

The VRS team are delighted to have won the award at this prestigious industry event, particularly when up against some of the most established names in the industry who were on the shortlist.

It is a particular honour to have received this industry endorsement of the work that the VRS are doing to support vulnerable consumers, given that the service has been operational for a relatively short time. It reflects the strength of the proposition, and the consumer need for the service that VRS are providing. Hopefully it can help to increase awareness of the ways in which credit providers can help vulnerable people to take control over their financial situation.

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Mental Health Awareness Week

The Money and Mental Health Policy Institute published research earlier this year showing that those with mental health problems are three times more likely to be in debt. Debt is often a major factor for those suffering with stress and anxiety and the two issues can feed into each other, creating a vicious cycle.

This week, in Mental Health Awareness Week, the VRS wants to highlight the link between mental health and debt and help to break down the stigma that people experiencing such difficulties are facing. It is, in fact, often referred to as a double stigma, in that both are issues that people are reluctant to talk openly about, but which are, frequently, deeply inter-connected.

There are, of course, many factors at play in people’s lives that can contribute to their overall wellbeing, but awareness of the role that financial stability can play is growing. Organisations working with vulnerable people have been drawing attention to the connection between the two problems, with recent Citizens Advice figures showing that 39 per cent of clients with overdraft issues have mental health difficulties, as opposed to 24 per cent of the group’s usual clients.

More action needs to be taken to address this situation, and stronger support in place to ensure that people experiencing mental health difficulties are at least able to feel in control of their finances, so that debt is not able to spiral out of control, impacting their mental wellbeing further.

The VRS has been set up to support vulnerable people who are looking to take control of their financial situation, or to work with organisations who are doing so on behalf of an individual. The VRS allows an individual to join the register for the duration of time in which they are facing a period of vulnerability, however long or short that may be. Crucially it will not have any bearing on future decisions about suitability for credit once removed from the register.

We believe that this helps to remove the stigma connected to mental health and debt, recognising that the statistics show that any one of us could experience financially vulnerability in our lifetime, and that it should not mean that we are judged for it, just supported through it.

If you are struggling to manage your debts, or your finances feel out of control, and this is either impacting, or a result of, your mental wellbeing, the sooner you take action the better. There are lots of excellent mental health and debt charities that you can contact, and the VRS is there to provide a supportive service for you when feeling financially vulnerable.

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How much value do you place on Vulnerability within collections strategy

At this time of year lenders will be gearing up to handle increased levels of borrower contact and the smarter lenders will be preparing for proactive contact. In recent years there have been big advances in the ability to use technology and data to develop pre-impairment indicators that can help identify signs of potential borrower strain before a payment has been missed. There is speech recognition software that can help identify a vulnerable consumer through trigger words and voice tone. All very admirable, and all tools available to help protect a customer from detriment and especially those customers that are vulnerable and should certainly be encouraged.

However, whilst most firms and organisations are trying to improve the situation for vulnerable consumers it is usually after the event of credit or products being provided. My brother Nigel and I have been involved in consumer credit activities for over 35 years and have practical experience in doorstep lending, short term lending, payday lending, debt collecting and our current business as debt purchasers. We have sat on numerous committees and boards of consumer credit trade associations and regularly attend consumer credit roundtables and workshops and it became apparent to us that whilst most firms identify and do their best to deal with vulnerable consumers after the event of credit or services being provided it seemed obvious why was help to identify vulnerable consumers not being done before credit or services are provided? Having looked into the matter further it was simple in that there was nothing to check against, there was no register of vulnerable consumers.

Of course, considering vulnerable consumers circumstances before credit or services are provided is a change to what is currently offered, but sometimes change is for the better. From our many years of working with all types of consumers, it is usually vulnerable consumers that will require additional resource and time spent in providing help and assistance and in many cases, it is abundantly clear that the credit or service provided was not suitable.

In my role as Compliance Directors of SLL Capital Limited, I see the despair of those issued credit when credit was not suitable, and services sold when it is clear the consumer did not require the service. I see cases of those that go on manic spending sprees, gamble with no control and all too often cases of partner fraud and sometimes just poor decision making especially if the consumers native language is not English. In fact, there are so many examples of vulnerability that we always revert to the FCA’s original definition of vulnerability from occasional paper No 8 which defines a vulnerable consumer as: “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.

You may be wondering if we can see the problem what are we doing about it? My brother and I have got together with a group of five like-minded individuals and formed a company called the Vulnerable Registration Service (VRS). The VRS is the only national register of vulnerable consumers. Our board consists of GDPR experts, Customer relationship management system IT experts, Credit Bureau data experts and business operational experts. The VRS also has an Advisory Board of recognised consumer credit experts that help to guide, innovate and challenge the VRS and feedback recommendations to the VRS Board.

The VRS is funded entirely by the stakeholders who all have a passion to try and improve the situation of vulnerable consumers and who’s mandate is to share a proportion of profit with those charities that help support the VRS and consumer database.

We genuinely hope that the lending community and in fact every organisation and service provider that genuinely wish to raise the game in helping to improve their business service to vulnerable consumers will use the VRS and its database of vulnerable consumers. Getting it right in today’s business place has never been more important. Getting it wrong could mean redress, company embarrassment and the regulator rightly looking at what you do.

Mark Bryant, Director at the Vulnerability Registration Service

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BUDGET NEWS – Extending debt Breathing Space

In last week’s budget the Chancellor announced that The Breathing Space Initiative is being extended from 6 weeks to sixty days which equates to about eight and a half weeks.

This scheme aims to give creditors a period of time free from fees, charges and collections activity while they are seeking debt advice and getting a solution in place before additional charges are introduced. It is hoped that this will reduce the stress that is encountered at this time and enable creditors to better manage their affairs.

This is a very welcome step and has been welcomed by many organisations that support vulnerable consumers especially those people with mental health problems who need more support at this sensitive time.

However, there is a general view that eight and a half weeks is still not sufficient time to allow consumers to get their debt management plans in place.
We at the Vulnerability Registration Service certainly welcome this extension to the Breathing Space Initiative and will be continuing our discussions with the Treasury to review how we can support its implementation next year.

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The National Audit Office Report

The National Audit Office” report out on 6 September 2018 says that there are 8.3 million people struggling with personal debt in the UK, other worry factors include:

  • 40% proportion of reported debt problems in 2017-18 relating to debts owed to government, up from 21% in 2011-12
  • £15 billion total outstanding mortgage arrears in 2018
  • £18 billion the NAO estimates of personal debt owed to government, utility companies, landlords and housing associations;
  • 4 in 10 estimated proportion of people in the UK who cannot manage their money well day to day
  • 5,000 approximate number of consumer credit lenders regulated by the Financial Conduct Authority
  • 600,000 estimated number of people who need debt advice but are unable to access it

The NAO goes on to say that evidence shows that good debt collection practice both benefits individuals and boosts collection rates. Common best practice principles include timely assessments of vulnerabilities, affordable repayment plans, and signposting or referring people to debt advice.

To read more follow link: https://www.nao.org.uk/report/tackling-problem-debt/

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VRS – News letter September 2018

Keeping you informed about recent events and developments within the VRS and how we are helping vulnerable people to make organisations aware of their circumstances.

As the Vulnerability database builds in volume, we thought it would be useful to check out where the most registrations were coming from in the UK. Hopefully, this will help organisations assess how registrations are relevant to their own customer-base, particularly if an organisation has a high proportion of customers in a specific region.

It remains free to load information to the Vulnerability Registration Service and if any company would like to conduct a pilot of using the service, please contact us.



Scotland 5% Northern Ireland 1% North East 3% North West 15% East Midland 28% West Midlands 15% Wales 2% South West 9% South East 14% Greater London 10%

Our Advisory Board

We are now extremely proud to have established our Advisory Board with a number of experts to help provide thought leadership while we continue to develop the Vulnerability Registration Service. Their wealth of experience combines an understanding of the commercial demands upon organisations while comprehending the importance of supporting individuals.

We are confident that the Board, in view of their broad experience, will help us to continue to develop a service that will help vulnerable individuals and the organisations who recognise the need to treat customers fairly. By sharing data between organisations and cross-sector, we believe the Vulnerability Registration Service will build to give an holistic view of vulnerability and streamline our ability to treat people in the right way and in a way that will minimise cost for companies.

James Jones

James is Experian’s Head of Consumer Affairs and leads the company’s public education programme guiding people on subjects such as credit reporting, credit scoring and identity fraud.

James regularly features on television and radio and in print and online media. He also runs an expert advice column on the Experian website and represents Experian at cross-industry forums. He is a director of the Money Advice Liaison Group (MALG).
James’ focus is upon supporting the consumer and enabling them to understand how their financial affairs will impact their lives.

Nick Pearson

Nick is regarded as one of the UK’s leading experts on personal debt having worked as a debt recovery consultant to several national financial institutions and served as a member of a wide variety of government task forces and advisory groups.
Nick is Head of External Relations at Gregory Pennington Limited, part of the Think Money Group. Previously, he was CEO of the Debt Counsellors Charitable Trust, having been appointed to set up the charity in 2014, and Director of External Affairs at the Paymex Group.
Nick was the National Debt Advice Coordinator at AdviceUK and Head of Debt Advice at the Citizens Advice office in London. He has worked as a specialist money/debt advisor and debt advice centre manager in organisations including a number of citizens advice bureaus, an independent advice centre, a students’ union and a local authority.

In addition, Nick has been a director and board member of the United Utilities Trust Fund, the Debt Managers Standards Association, Debt Resolution Forum and the Institute of Money Advisors. He has also been a member of the Financial Services Panel.

Anthony Sharp

The course of Anthony’s diverse career means that he can provide us with an invaluable amount of insight while we build our service. His experience means that he is sought after as lecturer and conference chair and to provide training.

Anthony has worked with Barclays International, the Church of England Children’s Society and the NSPCC as national fundraising organiser. He has held senior positions in the credit industry with Bentalls Plc and Asprey Plc and then joined the Consumer Credit Trade Association (CCTA) creating a long-running training operation. Much of this experience contributed to Anthony receiving the prestigious ‘Contribution to the Credit Industry’ award at the Credit Today Award Ceremony in May 2006.

Anthony was Chairman of the Central Region of the Civil Court Users Association (CCUA) for 19 years and now holds the position of Company Secretary for the CCUA. He was co-founder of the Money Advice Liaison Group and held the position of Chair for 29 years. He has held many distinguished positions in areas that are totally relevant to helping deal with vulnerability and made many contributions about how the issue should be addressed.
He was appointed as a member of the Bristol University Personal Finance Research on vulnerability and he is a member of the Money and Mental Health Policy Institute Advisory Board

Sue Wishart

Sue has extensive experience working in credit bureaus. She has strong commercial experience having had responsibility for the marketing of new services and databases to a variety of sectors. Sue also worked with many companies to enable them to use the Gone Away Information Network.

Sue worked as Head of Business Engagement for CIFAS, the UK’s largest cross-sector fraud sharing organisation, working with organisations to enable them to effectively utilise the CIFAS database to meet their business needs.

Sue’s experience has meant that she has a strong understanding about how data can be responsibly shared to effectively achieve the stated aims of any particular scheme and understand how to work with new sectors with various data sharing initiatives.

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19 Billion owed in everyday bills

£19 billion owed in everyday bills, as Citizens Advice reveals it helps 1 person every 3 minutes with bailiff issues

Citizens Advice is calling for better regulation of unaccountable bailiff firms as it reveals households have fallen behind on their essential bills, such as council tax and utilities, by an estimated £18.9 billion.
The Vulnerability Registration Service acknowledges the important advice and guidance that Citizens Advice provide to thousands of consumers with debt problems and would certainly agree that bailiff firms should be independently regulated to ensure that they conform with acceptable practices.

Of particular importance is that checks are made prior to any home visits in order to identify vulnerable consumers so that they are treated appropriately. Read More – https://bit.ly/2MruJqT

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Vulnerability in the Energy Sector

Vulnerable customers – do we need them, or do they need us?

It is clear that anyone who is vulnerable needs someone to help them. Is it as simple as offering those who are vulnerable some form of help? Or is that an oversimplification?

The question being pondered by Energy companies is exactly how to help. So, do we need them, or do they need us?

It is a deliberately provocative question that I hope will encourage some debate and thinking.

At The Vulnerability Registration Service (VRS) we are keen to learn more about the industries in which we work but also to share knowledge, insight and thought leadership. This paper is the first of a series in which we will look to share our expertise.

Ofgem the Energy industry regulator is concerned that the most vulnerable in society are also the most dis-engaged. Having no access to the internet, most likely to be pre-payment customer on a standard variable tariff i.e. the most expensive tariff provided by a supplier.

Ofgem estimate that over 4m customers will benefit from the safeguard tariff, with an extra 1m added from the Warm Home Discount scheme. They forecast that a further 2m will be added to the safeguard tariff in time for the winter of 2019.

All this builds up a picture of a growing issue in the Energy market, with more new companies joining the industry every month this adds to the challenge of vulnerable customers receiving a consistent level of service.

Whilst the industry has been instructed to protect pre-payment customers with a new tariff as well as the introduction of the debt assignment protocol (DAP) to encourage customers to switch to a better tariff the numbers switching still remain tiny compared to customers with a credit meter.

Some well-intentioned work but will it reduce the volumes of energy customers in fuel poverty. I think not.

With all the industry led initiatives and best practice at each business there is still so much more that can and should be done.

Everything we do at VRS is underpinned by intelligence and analytics. Whilst there is a great deal of reporting that exists on the topic of vulnerability there is more required in actual insight and what vulnerable customers think.

I noticed a discussion on Linkedin recently that asked:

“Should the energy industry define a joint approach without the need for the regulator to set out license conditions or principles and if so how do you do that effectively across a large and bureaucratic industry”?

There were a wide range of responses but most agreed that the regulator should not be needed to drive this action. Everyone recognised the scale of the challenge, there were a variety of ideas, but it was clear that the insight was thin on the ground, or at least those that took part of the discussion did not want to share any insight for fear that it would lose their business a competitive edge.

One industry expert said “Change within any industry is a challenge and usually takes quite a long time to implement. I do think this is the hardest part, I think perhaps enforcing the new policy could be tricky “

Another expert said “A complex issue where there is even disagreement on the definition of vulnerable. It comes up at every training session I do with collectors. “

So, in summary we all know this is a growing issue and there is no single solution, definition or experience for vulnerable customers. I could have rolled out more stats and comments from experts, but I really wanted to engage as many people as possible in working with me to do something different.

I want to leave you with a question and an offer to work together on something unique.

Is it true that vulnerable customers cost more to service than other customers, or in fact is it true that most vulnerable customers do not engage with the services made to help them? Maybe the truth is somewhere in between.

It is easy to get caught up in the edge cases and get convinced that these are the majority. I prefer to let the data do the talking.

To this end the VRS would welcome the opportunity to work with any business who is looking to understand more about vulnerable customers. This would form a cross industry research project that would allow us to understand more about how vulnerable customers take experience services from across industries. 

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Data sharing and vulnerable customers

In 2017 The Vulnerability Registration Service was approached by the Personal Finance Research Centre at The University of Bristol to take part in an expert interview to assist valuable research into the link between financial difficulty and mental wellbeing.

The research report was published in April 2018 in an article called “Sharing is caring? Could data sharing improve the support provided to customers in vulnerable situations?

This report asks whether the greater sharing of data between financial services firms could improve their ability to identify and support customers in vulnerable situations. It considers how such data-sharing could work in practice, and suggests things for the industry to consider if it is to take forward increased data-sharing.

You can read it here:
http://www.bristol.ac.uk/geography/research/pfrc/themes/vulnerability/publications/  You’ll see that the VRS get a mention on pages 44,48 and 52.

There are also some other interesting articles addressing vulnerability here, including a document summarising the findings from a number of events held by The University in 2017. From these workshop events, it became clear that poor mental health, addictions and even suicide were all more likely where people experience financial difficulties. Look for “Financial difficulty and mental wellbeing – a summary of our 2017 workshop series”.

The VRS is a platform providing vulnerable consumers with a single reference point for recording their personal circumstances at a given point in time. An individual with manic spending, gambling problems or any other money issue can protect themselves by registering on the VRS register. If a registered vulnerable person goes on to apply for credit or services when their well-being is being compromised, the VRS will allow the user of the register (creditor/service provider) to take the appropriate action. As well as protecting the vulnerable, the VRS helps firms and service providers to make better, more informed decisions. Doing the right thing is not just a regulatory requirement, morally it’s a good thing.  
Any thoughts?  

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