The Analysis News & Opinions
Advisors demand a ban on debtor imprisonment
Debt advisors have begun a campaign to ban public authorities from using a ‘legal anomaly’ that allows them to imprison debtors
for failing to pay Council
Tax debts. Council Tax debt is not a crime, but
magistrates in England and Wales can, and do, send some debtors with Council Tax arrears to prison. In a report, figures obtained via a
Freedom of Information request showed that 99 out of 279 local authorities took court action for imprisonment against 4,817 people in 2016-2017 – a rise of more than 10% compared to 2012-2013. Bradford Metropolitan Council launched
court proceedings against 969 people, resulting in 18 being jailed. In second place, committing 14 people to prison, was the
Vale of Glamorgan Council. Coventry City Council was the second biggest user of court
FCA updates credit- card debt consultation
The Financial Conduct Authority (FCA) has published an updated consultation on rules governing the treatment of customers in persistent credit-card debt. This follows an April 2017 consultation
paper on proposed remedies. These include firms, at designated timeframes, prompting customers to make faster repayments or proposing repayment plans, and intervening earlier if customers are struggling to repay. It suggests that, where a customer cannot
afford any proposed options to repay their balance more quickly, firms must take further steps to assist them to repay the
balance in a reasonable time, such as cutting, waiving, or cancelling interest or charges. The consultation includes revised analysis
of the costs of the proposed remedies, to take into account new data, and some data that was omitted from previous calculations. Andrew Bailey, FCA chief executive, said:
“The proposals we are introducing will save consumers billions of pounds by reducing longer-term borrowing on credit cards, which can be very expensive and can hide real financial hardship. We remain committed to action to protect consumers in the credit- card market as soon as possible.”
It is coming. 8
www.CCRMagazine.co.uk January 2018
action for imprisonment recording 156 cases and five prison sentences. Alistair Chisholm, head of advice sector
policy and partnerships at PayPlan, said: “Court action and the threat of prison are deeply distressing for the most vulnerable householders, who believe they have been unfairly lumped together with criminals. “Each day, our advisers speak to callers
who find themselves in a difficult situation because of relationship breakdowns, illness, or unemployment, or a combination of these factors. In most cases, there is no lawful reason to jail someone – but even the threat can be very damaging. “While the number of imprisonments
has actually dropped since 2009-2010, the threat of imprisonment is being more widely used. “Receiving court letters, let alone having
to find legal advice and stand before magistrates, is terrifying and completely out of proportion when no offence has been committed. “Many people struggle to plug the gap
between their income and their bills, and, as a result, Council Tax debt is a growing problem across the country. Threats of imprisonment are not the right answer to this problem.” He added: “England and Wales are
currently lagging behind Scotland, Northern Ireland, and other parts of Europe, where non-payment of local taxes does not lead to a prison sentence. There are also massive regional in the number of cases
differences
brought to court in England and Wales, suggesting a lack of consistency across the system.”
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