Author Topic: Worse than Wonga - why bailiffs’ fees need reining in  (Read 3660 times)

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Worse than Wonga - why bailiffs’ fees need reining in
« on: 05 June, 2017, 09:15:37 AM »
Simon English: Worse than Wonga - why bailiffs’ fees need reining in

The debt-collection industry has boomed since the credit crunch and every year billions s passed on in debt from councils to bailiffs Getty Images

Last year a 20-year-old courier from Camden called Jerome Rogers committed suicide after bailiffs clamped the bike that he needed for his job.

Two parking fines of £65 had spiralled to debts of £1019, partly due to bailiffs’ fees and Rogers could not cope.

The case led to calls for changes to the law and charities expressed alarm about bailiff practices. Having just had a run-in with bailiffs myself it seems clear that the law in this area is wrong.

I owed council tax of £200 to Islington. I didn’t know I did, but the council says it made numerous efforts to get in touch before handing the matter to an enforcement agent.

The bailiffs, a firm called Phoenix Commercial Collections, were rather better at attracting my attention. Once they did, I paid the debt but not its fee of  £75 while I investigated.

In a matter of days that fee went to £310, accompanied by regular visits from a bailiff who made it clear he intended to get into the house and take what he needed.

Legally, he was allowed “peaceable entry”, which seems to mean that if he gets his foot in the door, he’s in.

When I told him on the phone I wasn’t going to let him in, he replied “we’ll see”. There is no other way to interpret that than as a threat.

That leap in the fee from £75 to £310 is a rate of interest even Wonga at its worst would not have got away with, many thousands of per cent a year.

Phoenix says the objective of the fee structure is to “incentivise early compliance”, but again, you’d have to know what was coming to realise that. I didn’t. Who is Phoenix? Based in Bolton, Phoenix says its “mission” is to “deliver a high-quality collection and enforcement service with the highest collection rates and exemplary standards of customer service”.

The lead director is Howard Jones, who says on LinkedIn that he cares about “animal welfare” and “children”.

His interests include Liverpool Football Club and debt collection. There’s a picture of him in a bow-tie holding a glass of wine, looking as if he is toasting the crowd at the annual Bailiffs Ball.

I called him on his mobile to discuss his business one evening, but he wasn’t keen.

He thought I should make a proper appointment rather than just call him when I felt like it. No, he didn’t see why that was funny. Then he hung up.

Since the credit crunch, the debt-collection industry has boomed. Every year, billions more is passed on in debt from councils to bailiffs, it is a huge, growing sector of the economy. Concern about its behaviour is also growing.

The Financial Conduct Authority doesn’t regulate debt collectors when it comes to collecting tax. But it says it is looking at debt-management firms closely amid wider disquiet.

Asked why it employs a Bolton firm rather than a local bailiff, Islington council (I’m in Jeremy Corbyn’s constituency as it happens) replies: “All our enforcement agents are licensed, used by other local authorities, and have established complaints procedures.”

The complaints procedures may well be established. They are also hard to navigate. Let’s agree that the initial failing here was mine, but it proved extremely difficult to challenge the procedure, to put a brake on the process.

I asked the individual bailiff if he would give me a few days’ grace while I looked into the matter, not turn up to the house for a while. No, he said, he’d turn up whenever he liked and I was wasting my time trying to delay.

“They are not going to change the law for you mate, are they?” he mocked.

Indeed not, but in most other matters you are at least allowed some time to establish what the law is and check you are on the right side  of it.

Eventually, I got a seven-day delay on the process, but I get  the strong impression that was granted only because I’m a pain-in-the-arse journalist.

Carole Kenney, another Phoenix director, said: “I do genuinely appreciate this was a shock, and unfortunately it is never a pleasant one. The statutory process for council tax and now enforcement does require notices to be sent prior to action and escalating costs. We are all human and have busy lives and it is not uncommon for this to go amiss from time to time.”

She says Phoenix has a very good reputation. If you Google “Phoenix Commercial Collections + harassment”, you’ll see not everyone agrees.

Kenney says: “I cannot argue that enforcement activity would not be stressful. There has, however, been a significant amount of culture change and training across the industry to support identifying vulnerability and making better decisions in these cases.”

For the relatively well-resourced, not-easily-terrified person who can just about locate £310 when he needs it, matters like this are merely unpleasant.

But I still left the house every morning worried for my family and took to parking the car several  streets away.

For most of the poor families in Islington likely to find themselves visited by council-employed bailiffs, something like this would be a cause of extreme stress.

To be clear, Phoenix and Islington followed the law. That law seems unnecessarily brutal, devised to punish rather than resolve. 

Organisation including Citizens Advice and the StepChange Debt Charity are among those who say there should be significant changes to the law.

Corbyn says he wants to deliver for the many, not the few. If he means it, perhaps he could have a look at the debt-collection trade.