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In Focus Commercial Credit

Top, left-right: Alan Smith; Michael Higgins; Rachel Greenway; Frank Johnstone; Andrew Jackson Bottom, left-right: Richard Houlbrook; Wendy Miles; Sadak Miah; James Perry; Karen Savage


those have been able to make the change to a more TCF world.

KS: The HCEO route works well as up until the HCEO is instructed with that knock at the door, court activity is a paper process. The letter before claim, claim form and judgment are all sent by post. The sheriff’s visit forces engagement and the dialogue begins. I have worked in this sector for 23 years and can count on one hand the number of times goods have been seized and sold. It is that face-to-face meeting with the sheriff that results in a discussion, an offer, and in most cases instalments being agreed.

AJ: You need to look at all the different types of ways that you engage with customers, whether it is drop-in centres or door-stepping or even the use of social media. Using data and behavioural analytics technology is how you reduce costs and increase success.

AS: The question is: if there was effective enforcement there for the creditors, would they use the county court more, therefore issue more claims? In turn, if more claims are issued, more income would come in to the Court Service, therefore would there be a need for an increase in the court fees?

Would you support a change in the High Court and County Court Jurisdiction Order 1991 that would


allow HCEOs to do Consumer Credit Act regulated work? SM: I would certainly favour it, it gives clients options that they do not have at the moment. The challenge is that different clients have different views as to what TCF is. Clients will want that comfort that actually it is alright to use HCEOs and that the HCEOs will have TCF firmly in mind.

ML: There are two elements that the advice sector have in opposition to JOs being extended to HCEOs. The first is level of fees, which we are entitled to under the Taking Control of Goods Act, particularly the second-visit fee. The second issue is the VAT element, and there is a lot of misinformation regarding whether agents should charge VAT on fees. Our view is that, until HMRC gives us a clear indication of what to do, the situation remains as it is.

KS: If you are a law firm dealing with recoveries in the consumer credit, your business model will mirror FCA principles as best practice. I, and many of my clients, would welcome the involvement of the HCEO in the consumer sector as they are a body of professionals who will achieve excellent results and mirror the FCA principles in the same way we do.

JT: The practical aspect would be the same as for solicitors, in that every contract

requires you to comply with CONC and so on, so you are very accustomed to that. So a lender would say to their solicitor that ‘we are happy that you should use that form of enforcement, but here is the due diligence that you need to go through’ and there would be a substantial audit regime from the clients to back that up.

In April 2014 new regulations introduced a seven-day notice period and a revised fee structure – has this been a success? RG: I have been an advisor in the past so the concern on the fee structure was if an enforcement officer would turn up at the door and go through every enforcement stage in the hour that they were there, adding on the fee at each stage.

AS: It is a question of does the debtor want to engage with the enforcement agent or not? If there are goods, then the agent needs to follow procedure. It is possible, on day one, to move between different enforcement stages, but you can only move on to the next stage if certain actions happen.

JT: If the consumer engages from the seven-day letter, then they will not face any charges for further enforcement stages. The need is for them to engage in the process. You are a long way down the line before you get to the enforcement. CCR

October 2015

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