Money Advice Trust policy manager Meg van Rooyen blogs on the Ministry of Justice’s call for evidence on bailiff reform

Today we have responded to the Ministry of Justice’s Call for Evidence on bailiff reform, alongside our 10 partner organisations in the Taking Control campaign.  Our joint response brings together evidence from across the advice sector, and is overwhelming in its conclusion that independent bailiff reform is urgently needed to address systemic problems in this industry.

Two years ago we launched the Taking Control campaign at an event in Parliament, following continued reports of widespread problems with bailiff action – despite reforms in 2014 that aimed to deal with these issues. From the people we help at National Debtline, StepChange Debt Charity, Citizens Advice and other charities – it was clear the ‘Taking Control of Goods’ regulations had only limited success and further action was needed.

Since then, the need for bailiff reform has risen steadily up the agenda – leading to the Ministry of Justice announcing its welcome call for evidence last year. 

Last month the campaign received resounding cross-party support from MPs in an encouraging Westminster Hall debate.  The Trust’s chief executive Joanna Elson and colleagues from Citizens Advice and StepChange Debt Charity later gave evidence to the Justice Select Committee Inquiry – sharing some of the evidence that has gone into the response we have submitted to the Ministry of Justice today.

Our full response is more than 160 pages long – so here is a quick tour of some of the key points as I see them.

Only independent regulation will do

At the heart of many of the problems we see is the absence of the kind of independent regulation on bailiffs and bailiff firms that is now commonplace in other industries, such as the financial services sector.  The bailiff industry is a real anomaly here.

The Taking Control of Goods regulations introduced in 2014 have largely failed to clean up the industry, as there is no sanctions regime nor are there incentives on firms to comply. There is no independent regulator in place which can ensure that bailiff firms and individual bailiffs stick to the rules which govern their behaviour and treat people in debt fairly.

What’s more, this lack of independent regulation is having a disproportionate impact on people in vulnerable circumstances.

• In 2017/8, Citizens Advice saw over 5,600 clients with issues related to the treatment of vulnerable people by bailiffs, a 42% increase from 2014/15.
• National polling shows that of people contacted by bailiffs in the last two years, 18% had witnessed bailiffs treating someone with an illness or disability unsympathetically.
• 83% of National Debtline callers surveyed who had experienced bailiff action reported a negative impact on their wellbeing.

These figures show that what we are talking about goes far beyond the common refrain of a “a few rogue bailiffs” – the problems we see are systemic, and that means we need a systemic solution.

People must be able to complain

Only a small number of complaints about bailiffs are recorded, relative to the levels of poor practice reported to the advice sector.  As our colleagues at Citizens Advice have revealed, since the 2014 reforms, there have been just 56 complaints to court about bailiffs – and it is unclear how many of these resulted in the bailiff’s certificate being revoked.

There are no effective penalties for firms whose bailiffs break the rules. While individual bailiffs can have their certification revoked, the firms who employ them face no specific consequences. This is in stark contrast to financial services, where not only can the Financial Ombudsman Service provide financial compensation, but the regulator can fine firms for rule breaches.

Just as in other industries, it is vital that people have the ability to complain and seek redress when this is due.  In addition to independent regulation, the government must put in place a single, free and independent complaints mechanism to ensure people can obtain redress when bailiffs break the rules.

Fixing the flawed bailiff fee structure

The way that bailiff fees are structured results in a disproportionate level of fees being added to small debts that exacerbate financial difficulties.  On the debt advice front line we come across cases where debts of less than £100 grow to several hundreds of pounds in a relatively short space of time. 

There is also an in-built incentive, resulting from the escalating statutory fee structure, for bailiffs to let collection of debts escalate to the enforcement stage, rather than encouraging early settlement.

The fee structure should be revised to make sure that bailiffs are instead incentivised to do the right thing, with a statutory list of activities that bailiffs must carry out before moving on to each next stage.

We need action to reduce bailiff use, too

The need for bailiff reform is urgent – and we hope the Ministry of Justice will take this opportunity to introduce the independent regulation, complaints mechanism and other changes that the Taking Control group has called for.  Fundamentally, it cannot be right that debt collection agents are subject to rigorous regulation by the FCA, whilst bailiffs, with their substantially greater powers to drastically affect people in the most vulnerable of circumstances, are not.

We must not lose sight of the fact, however, that action is also needed to reduce the number of debts being passed to bailiffs in the first place.

The Money Advice Trust’s Stop The Knock research in 2017 found that local authorities in England and Wales passed 2.3 million debts to bailiffs in a twelve month period.  Councils need to do much more to help people who fall behind at a much earlier stage – an issue that the Trust will be returning to later this year as we continue our ongoing campaign for change.

This is the moment to act…

For now, I’ll end with a reflection on two years of working together with a large group of dedicated and talented colleagues from our Taking Control partner organisations – building and combining our evidence, engaging with stakeholders and making the case for change in Westminster and Whitehall.

It is not often that a policy issue brings together the entire advice sector – with all our differing advice models, approaches and perspectives – behind a single set of recommendations in such a united fashion.  This common purpose has now been joined by a similar unity in Parliament, with MPs across the political spectrum demanding change.

It is our hope that this unity of purpose – and the weight of evidence we have submitted today – demonstrates to Ministers the urgency of the need to reform the bailiff industry, for good.

Find out more about the Taking Control campaign and read our full response to the call for evidence at www.bailiffreform.org.