Scottish Labour to Vote on Bankruptcy Fees

On Friday the 9th March, the Scottish Labour Party will vote on a motion calling for the Scottish Government to accept the recommendations of the Money Advice Service (MAS) and re-introduce fee remissions and fee waivers for bankruptcy in Scotland.

Fee waivers were previously possible in Scotland, through legal aid, prior to 2008, but since then even people surviving on £73.32 per week, have to find £200 to apply for bankruptcy.

MAS in its report Debt Solutions in the UK: Recommendations for Change, recommended both the UK and Scottish Government look at reintroducing fee remissions for those who cannot afford the fee.

The Accountant in Bankruptcy, the Scottish Insolvency Service, is currently consulting on their fees, but has ruled out fee remissions for bankruptcy.

Currently, the application fee for a Full Administration Bankruptcy in Scotland is £200; whereas a Minimum Asset Bankruptcy is £90.

Debt Advisers asked about Vulnerability

Debt Advisers asked about Vulnerability

The largest survey of UK debt advisers has been launched to gain an insight into how they support clients that are in vulnerable situations.

The new research, which is asking for advice agencies to sign up and participate in the project, is being carried out by the University of Bristol’s Personal Finance Research Centre (PRFC), who are working in partnership with the Money Advice Trust and the Money and Mental Health Policy Institute. The research is being funded by a grant from the Money Advice Service.
Working with the advice sector and other experts, findings from the survey will inform the development of new guidance and practical tools to help frontline debt advisers to further support their clients.

Sharon Collard, director of the Personal Finance Research Centre at the University of Bristol said:

“Every day, across the advice sector, advisers work with clients to deal with their debt problems and try to get their finances back on an even keel.

“There is currently no published information about the extent to which those clients are in particularly vulnerable situations or what that means for advisers and their organisations. With the help of the advice sector, this survey aims to fill that gap.

“We know that advisers work under a lot of pressure, so we’ve designed the survey to take about 15 minutes to complete.”

Simon Crine, director of the Money and Mental Health Policy Institute, said:

“Debt advisers do a crucial job, helping tens of thousands of people every year. But it’s not easy – particularly as many clients will be dealing with multiple complex problems like mental health issues, bereavement or housing difficulties as well as their debts.

“We want to know more about what it’s like for advisers on the frontline, what would make their jobs easier, and how we can help to improve outcomes for their clients.”

Advice agencies who wish to register in the research can do so here.

FCA fine Vanquis £1.96 million and orders them to pay compensation

The Financial Conduct Authority have fined Provident Group, credit card lender, Vanquis, £1.96 million and ordered them to pay compensation.

The FCA found that Vanquis mis-sold its customers, from 2003, an add-on product for its credit cards, called a Repayment Option Plan (ROP).

The product was intended to give Vanquis customers the option of an annual payment holiday, without fees or charges, for the cost of the ROP.

However, Vanquis failed to alert it’s customers to the fact the ROP fee attracted interest and this wasn’t cleared until the balance was cleared at the end of each month.

The FCA Fine has ordered Vanquis to pay compensation to all its customers affected from the 1st April 2014, when they took over regulation of the consumer credit market; however Vanquis has voluntarily agreed to pay it to customers who bought the product between 2003 to the 31st March 2014.

Customer affected by the product do not need to do anything, as Vanquis has offered to identify and contact all affected customers.

For more information, see here.

Money Advice Performance Report Published

The Money Advice Outcomes project team in the Improvement Service have published their Money Advice Performance Management Framework (MAPMF) annual report for 2016/17.

All Scotland’s 32 local authorities submitted data returns regarding the funding of money advice service in 2016/17.

The key findings were:

  • Investment by local authorities totalled c.£11.72m, representing a reduction of 5% since 2015/16
  • 305 FTE paid staff members were employed by the services, which represents a 5 FTE decrease when compared to 2015/16
  • 31% of service users had a disposable household income of less than £6,000, and 50% less than £10,000 – the median household disposable income in the UK is £26,300
  • 53% of clients reported having a disability or long-term condition, whereas around 20% of the general Scottish population has a disability or long-term condition
  • The total debt owed by clients was c.£217m, an increase of around £2m in comparison to 2015/16
  • c.111,000 people contacted the services, and c.49,000 new clients received support – in both cases this represents a 5% increase since 2015/16
  • 19% of clients initially sought advice because of council tax arrears
  • Money advice services delivered or funded by local authorities secured £101m in client financial gain
  • For every £1 that was invested in money advice services, clients achieved financial gains of £4-9

The full report can be read here.