Archive for October, 2014

One Advice Halloween Fundraising

It’s a triple treat day for the staff at One Advice, with fancy dress, pumpkin carving and a bake sale.
Staff are donating to Forever Manchester, a fantastic charity that helps communities in the Greater Manchester area, where our offices are based.

Take a look at some of the great work our staff have done.

cake2

pumpkin6

cake1

104_0515

cake9

Harrington Brooks Article in Debt Management Today

debtManagementToday

Debt Management Today have released an article entitled FCA regulation has desired effect on the debt management sector, says Harrington Brooksfeaturing findings from our quarterly comment Let’s Talk About Debt.

Government Statistics Reveal Decrease in Personal Insolvencies and Bankruptcies

The Government’s insolvency statistics for the July-September 2014 quarter have revealed signs of a strengthening economy for individuals and companies in England and Wales.

The number of people becoming insolvent in England and Wales has fallen 4.6% to 24,837 when compared with the same quarter of last year. This figure was driven by a decrease in the number of bankruptcy orders, which are at their lowest level since the first quarter of 1999. The number of 4,886 represents an 18.7% decrease compared with the same period of 2013.

Though IVAs have increased year-on-year in the previous five quarters, IVAs in England and Wales have decreased by 1.9% since the July-September quarter of last year. In contrast, there has been a 2.7% increase in people granted a debt relief order (DRO.)

The statistics show a decrease in the rate of insolvency over the last 12 months, with 1 in 446 adults (just over 0.2% of the adult population) entering into some type of formal insolvency procedure. This decrease comes after an increase in the previous quarter, suggesting the rate of insolvency in England and Wales remains at a stable trend.

For companies, the number of liquidations in England and Wales decreased by 11.7% compared to July-September, 2013, with 1 in 186 companies going into liquidation in the year ending September, 2014.

The statistics also revealed a decrease in company voluntary arrangements and receiverships, and an 18.8% decrease in administrations.

David Rankin, Lead Insolvency Practitioner at One Advice, said:

“While the statistics may suggest a downward trend in personal insolvencies it must be remembered that until non-statutory debt management plans are officially recorded, it will be impossible to establish the true picture of personal insolvency in England and Wales. Research by insolvency industry body R3 shows that 44% of British adults are worried about their level of debts, while one-in-four 25-44 year olds have five or more debts to their name, so falling insolvency numbers do not necessarily mean the UK’s personal debt issue is going away.

“A rise in interest rates in 2015 may put too much pressure on some household finances while the outcome of a recently closed government ‘call for evidence could make it easier for people to access Debt Relief Orders while at the same time making it harder for creditors to make people bankrupt. In addition, the effect of regulation of Debt Management Plan providers by the FCA may also result in more consumers being placed into a formal insolvency solution.”

Matt Cheetham, CEO, Discusses the Future of Debt Management

Matt Cheetham features in profile in the latest installment of Debt Management Today. The interview offers an insight into the CEO of the One Advice Group as he discusses Harrington Brooks, the nation’s debt crisis, the future of debt management and regulation within the industry.

Read the full article here.

Quarterly Comment: Let’s Talk About Debt

Harrington Brooks

Harrington Brooks has released its first Quarterly Comment, Let’s Talk About Debt (PDF), to encourage discussion about debt and financial issues, as well as providing a round-up of the changes going on on the debt industry.

Debt can be a difficult issue for people to talk about, but admitting there are financial difficulties a key step in getting back on track.

Thousands of households are vulnerable to debt – a massive 9.24m have no savings, with a further 3.4m having only £1,500 as a safety net should their circumstances change. 13% of our clients fell into debt following increased expenditure, and with research suggesting a 0.5% rise in interest would inflate the monthly cost of a £100,000 mortgage by £60 this figure could be set to rise.

The debt industry has undergone significant change within the past year, most notably the introduction and enforcement of FCA policies and guidance.

Through being open and transparent about the debt industry and the financial issues currently affecting the UK, stigma around debt and money worries can be reduced, making seeking a solution a much less daunting process.

CSFI Round table debate, 1 Oct, 2014

Healthy round-table debate hosted by CSFI, between Matt Cheetham and Damon Gibbon, Director of the Centre for Responsible Credit. “Regulating the debt management industry – has the FCA done enough?”

Matt Cheetham, CEO of Harrington Brooks, attended a round-table debate about the FCA’s regulation of the debt management industry, hosted by CSFI in London.

The matter of discussion was the regulation of the debt management industry, and whether the FCA is doing enough, but the debate also raised questions as to if enough is being done to raise the level of education around money management and if the quality of the advice and ongoing service offered by both fee and free based providers is good enough.

Matt Cheetham volunteered to take part in the discussion, representing fee-based debt management services as CEO of Harrington Brooks since 2007, during which time the number of customers with debt management plans handled by the company has grown from 15,000 to over 55,000. He is also a director of DEMSA, the Debt Managers Standards Association.

At the roundtable discussion, Cheetham engaged with respondent Damon Gibbon, Director of the Centre for Responsible Credit.

April, 2014, saw the FCA take over regulation of the consumer credit industry, with debt management companies now required to meet requirements that make for a fair and balanced customer-centric service. In achieving this, the FCA have ruled that debt management firms must signpost the availability of free debt advice, commence debt repayments to creditors immediately without front-loading fee deductions and ensure that customer funds are adequately protected.

Companies that fail compliance with the new regulations risk fines and removal of full authorisation from the FCA.
Matt addressed the matter of 1 in 28 UK households – over 1million households – in either a financial Management plan or an IVA at any one time, with a further 7-8 million to have stated that they are struggling financially. He also made the point that, with wage inflation not keeping pace with cost of living increases and interest rates forecast to go up from historical lows, the problem is likely to get bigger rather than smaller in 2015; with that in mind, everyone is likely to know someone who is financially struggling.

Matt drew on his seven years’ experience as CEO of one of the UK’s leading financial solutions, expressing that debt issues are not solely around poor family budgeting, but better financial education in society, and a need for improving the nation’s financial illiteracy in battling the spiral of debt. He expressed the view that in paying for the advice of the fee-based debt management companies, it is the standards of that debt management that must continue to improve, welcoming the changes to the industry made by the FCA and in particular the focus on having a customer centric approach. Cheetham stated:

“Regulation has been a much needed catalyst to raise minimum standards across both debt managers and creditors but to some extent, that’s not addressing part of the problem which is about education.

“Having acknowledged the FCA’s regulatory efforts Matt also commented; “What should be important is the quality of the advice and ongoing service rather than who pays for it”.

During the debate Matt used the opportunity to explain the process that each customer goes through explaining that Harrington Brooks initially spend a lot of time with new customers agreeing a budget for them to work within and coaching and supporting them on an ongoing basis to help them achieve this and also raised the point about what is deemed to be essential expenditure.

“People in debt need to be motivated to make repayments and show they are making an effort to repay what they owe, but who decides if Sky TV is an essential expenditure?”

“We talk to thousands of customers and few of them ever confess to a gambling problem but we know that it is probably a major cause of financial difficulty. While I don’t want a nanny state, if we want to reduce the 1m households in a financial management plan or an IVA and the further 7m who are struggling financially, then I’d like to see more joined up thinking.

“Whether advice is free or paid for, the detriment of poor advice to the consumer is just the same.”