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Opinion
SFGB responds to FOS collections complaints
Plea for action on UK late payment
In response to the new figures released by the Financial Ombudsman Service. on debt- collection complaints, we would conclude that we know that poor debt-collection practices can have a detrimental impact on people who are in financial difficulty, and these new figures show that there is room for improvement amongst creditors when it comes to supporting some of their most vulnerable customers. With over 8.3 million overindebted people
in the UK, it is more important than ever that the sector engages in progressive methods of recovering debt to improve outcomes for these customers. We are pleased to hear that some
creditors are already engaging in best- practice methods. This aligns with the standards outlined in
the Money Advice Service toolkit for creditors which outlines seven steps to improved collaboration with debt-advice agencies, and better support of customers in financial difficulty.
Caroline Siarkiewicz Director, the Single Financial Guidance Body
Governments in Edinburgh and London need to deliver a new drive to stop big businesses paying their smaller suppliers unacceptably late, according to a major trade body. The Federation of Small Businesses (FSB)
Spring Statement, Fair Pay, Fair Play, calls on the UK government to force the biggest companies to appoint non-executive directors for payment practice and supplier relationships. Further, FSB is urging UK ministers to introduce fines for companies who do not publish legally-required payment data. North of the border, the group is urging
the Scottish government to bar the worst late payers from devolved public contracts. They are urging that Scottish public bodies should ask large potential suppliers for evidence that they are a responsible payer before awarding taxpayer funded contracts. Andrew McRae, FSB’s Scotland policy
chair, said: “Our lamentable payment culture is not a new phenomenon, but that does not make it any more acceptable. As we face the possibility of a sustained period of economic turbulence, we cannot see bigger businesses use their smaller customers as a free source of credit. “For far too long, government has tolerated big businesses treating their smaller suppliers
with disrespect. Our patience has grown thin and we want to see decision-makers pull every lever available to eradicate this corrosive practise.” FSB research shows that thousands of
Scottish businesses close down every year due to ‘supply-chain bullying’ and late- payment practises. Analysts claim that these closures could be prevented if Scotland adopted a similar payment culture to other European nations. Four in five (84%) UK smaller businesses
in supply chains say that they have been paid late, according to FSB research, while a third (33%) say at least a quarter of payments they are owed arrive later than agreed. Survey work also suggests that about
one in three (36%) Scottish businesses have run into cashflow difficulties as a result of late payments. UK small businesses say that 60% of late
payments are greater than £1,000 in value while the average value of each late payment owed to a Scottish firm is £5,718. Mr McRae added: “It is clear that late
payment makes it more difficult to run a business in Scotland. In addition to seeing action from government, we need to see leaders of big businesses in Scotland take responsibility for how their companies treat their supply chains.”
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www.CCRMagazine.com
March 2019
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