Archive for November, 2014

Wonga Interim Chief Executive Resigns

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Tim Weller, Interim Chief Executive of payday lender, Wonga, has parted from the company after six months in the role.

Wonga are currently seeking to fill the role permanently, with Andy Haste, former CHief Executive of RSA overseeing operations. Haste stated:

“At a critical time for Wonga, when we will complete our forbearance programme, prepare to apply for FCA authorisation and introduce a cap-compliant product, I’m taking an even more active role in leading the business.

“Tim Weller therefore stepped down as interim CEO in October. This was a mutual decision, following a comprehensive handover, and will ensure clear leadership in the weeks and months ahead. I want to thank Tim for his three years in the business as chief financial officer.”

Government statistics reveal greater consistency in IVA standards

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The Insolvency Service have released statistics outlining the outcome status of new cases registered between 1990 and 2013 in England and Wales, highlighting:

  • an increase in IVA failure rates for IVAs registered between 2001 and 2007;
  • an uncertainty in failure rates for 2005 and later registration due to many still ongoing;
  • the percentage of IVAs failing within the first two years decreased for IVAs registered from 2011, in comparison to those registered before 2008;
  • over 5% of IVAs registered in 2005 and 8% in 2006 were still ongoing, having started around 8-to-9 years earlier.

One Advice Insolvency Practitioner, David Rankin commented:

“The Insolvency Service has recently issued statistics on the failure rates of Individual Voluntary Arrangements Registered between 1990 and 2012. While the statistics make for interesting reading it is difficult to draw too many conclusions for a variety of reasons, not least of which is the fact that as IVAs are typically due to last for 5 years a large number of IVAs that began after 2009 are still live but a percentage will obviously fail before reaching their full term.

“Up until 2003 IVAs were used mainly by self-employed individuals dealing with the insolvency of their business and only began to be used by employed individuals seeking to deal with consumer debts from 2004. In 2003 there were 7,500 IVAs registered. The table below shows how that number grew over the following 3 years:

2004: 10,752
2005: 20,293
2006: 44,332

“In 2007 creditors tightened their acceptance criteria for IVAs and in February 2008 the IVA Protocol was introduced. This is an industry-wide agreement that encourages best practice and streamlined procedures. As a result of these changes, the number of IVAs has remained fairly static at around 48,000 per year.

“The failure rate of IVAs prior to the explosion in consumer cases (pre-2004) was running at around 30%. That rate rose thereafter, reaching a peak of just under 40% of those IVAs that commenced in 2007. The failure rate does appear to have fallen again following the introduction of the Protocol in 2008 but it is difficult to draw any absolute conclusions due to the fact that many IVAs set up in the years after that date are still in existence and the true failure rate cannot be determined until there is more maturity of those IVAs.

“The figures for failures within the first year is probably a more reliable indicator of the trend and the statistics do indicate that since the introduction of the Protocol that rate has fallen significantly. This would seem to indicate that the Protocol has achieved its aim in bringing greater transparency and consistency in the standard of IVAs being proposed. Since its introduction there have also been amendments to the Protocol that have facilitated greater flexibility when debtors encounter difficulties and pressures due to life events, reductions in income or increases in expenditure.”

Radio Fame For Harrington Brooks Staff!

One Advice staff took to the airwaves to discuss the many fundraising activities we have been involved in support of Forever Manchester. The LDOK Forever Manchester Radio show is dedicated to highlighting and supporting Greater Manchester’s communities and people.

Each year, One Advice staff members vote for a Charity of the Year, towards which all our business fundraising efforts go. Forever Manchester supports community groups and causes within the boroughs of Manchester, including Sale, where our offices are based.

We are proud to say that since August 2014, our staff have raised around £2000 for the charity. We have had activities including cake sales, a 52 mile cycle challenge, and even an abseil down the Printworks building in Manchester city centre.

Our Radio Stars

Colin Lowndes
Colin works in our Admin Support team, and has done an incredible amount of charity fundraising over the past year. He has run 10k and cycled over 125 miles, and also raised money for Macmillan, Sport Relief and The Christie. Unfortunately, he sustained a serious knee injury training for his next event, and so has been unable to undertake anymore physical challenges, though he has been supporting from the sidelines, as well as taking part in our Charity Pumpkin Carving contest.

Colin has signed up to 100 miles worth of cycle challenges, a 10k run and a 1 mile swim for when his leg has recovered next year.

Richard Gurney
Richard is one of our Personal Finance Managers, and was chosen by staff to represent Harrington Brooks following claims he has a “face for radio”!
Last year, Richard was awarded a Certificate in Money Advice Practice by DEMSA and The Institute of Money Advisers, recognising his excellent customer service and the level of advice he provides.

Jodi Hamilton
Jodi is Head of Marketing for the One Advice Group, and has been involved with promoting Forever Manchester activities to staff as well as working with local schools and communities so that they can be supported by Harrington Brooks, either through mentoring or provision of resources.

Jodi said of Forever Manchester:

“Supporting a local charity that puts money back into the community is really important to us. Harrington Brooks is based in Sale and a large proportion of its employees live in the Greater Manchester area. It is great to see so many of our staff getting involved and supporting Forever Manchester as it is a truly worthwhile and important cause.”

FCA Cap for Payday Loans Confirmed

The Financial Conduct Authority (FCA) has confirmed limits on costs, fees and interest charged by payday lenders, following wide consultation with various industry stakeholders.

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Stella Creasy, Labour and Co-operative MP for Walthamstow

From January 2nd, interest and fees must not exceed 0.8% of the loan amount per day, and default fees must not be greater than £15. Ultimately, a borrower will not pay back more than twice what they have borrowed.

The FCA estimates that through their regulations, 70,000 people are “protected” from payday loans – people that might have taken out loans and been worse off for doing so. However, Labour MP Stella Creasy has criticized the plans, arguing:

“Today’s news will be welcomed as an early Christmas present for Britain’s legal loansharks. This cap is just £1 lower than their current charges.”

Creasy is a campaigner against doorstep lenders and for greater restrictions in the payday sector , as well as for financial education.

Martin Wheatley, the FCA’s chief executive officer, has expressed confidence in the changes, stating:

“The new rules strike the right balance for firms and consumers. If the price cap was any lower, then we would risk not having a viable market, any higher and there would not be adequate protection for borrowers.”

Matthew Cheetham, Chief Executive of Harrington Brooks, is supportive of the changes, commenting:

“Harrington Brooks welcomes the efforts of the FCA to clean up the sector.” Adding “It is imperative that the regulator continues to enforce the new affordability requirements that came into effect in April.”

Tough Affordability Checks Should be the Norm

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As a result of Wonga putting in place tough new affordability checks and writing off unpaid debts, Harrington Brooks will be able to remove over £3m of Wonga debt from customers financial management plans, the firm revealed today.

More than 10,000 of Harrington Brooks’ customers have Wonga debts and will no doubt welcome the news that the lender in total has written off £220 million worth of debts for 330,000 of its customers. A further 45,000 of Wonga’s customers in arrears will no longer have to pay interest on their loans.

However, the problem does not stop at Wonga. The FCA’s director of supervision, Clive Adamson, has said that the announcement should “put the rest of the industry on notice”, and Harrington Brooks agrees. Around 45% of Harrington Brooks’ customers have taken out a payday loan, and today the debt management firm is calling on all payday lenders to ensure that they consistently carry out robust affordability checks for their customers.

Matthew Cheetham, Chief Executive of Harrington Brooks said: “We want to see every payday lender in the sector follow Wonga’s lead and introduce stricter lending criteria to address poor lending decisions. For too long the high-cost-credit sector has chased volumes causing considerable customer detriment. Harrington Brooks welcomes the efforts of the FCA to clean up the sector, but it is imperative that the regulator continues to enforce the new affordability requirements that came into effect in April.”

-END-

Notes to editors

As one of the UK’s largest personal insolvency companies, Harrington Brooks manages £920m+ of unsecured debts for over 75,000 customers and helps customer repay over £7m to creditors each month.

Established in 1998, its intention has always been to be a safe place for people in debt to find counsel and support – ensuring the best advice is given and appropriate solutions provided at all times.

It is a member of DEMSA, the industry trade association, which promotes good practice in the debt management industry to protect the interests of the public and the lenders to whom they owe money. DEMSA’s code of practice has approval from the Trading Standards Institute and goes further than the basic requirements of the law.

For further information please visit: http://www.harringtonbrooks.co.uk/

Or contact:

RalphJ@lansons.com
Tel: 020 7294 3667

3i Group Executive Appointed CEO of DFC Global

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Bob Stefanowski, a Trustee of the V&A Museum’s investment committee, has been appointed chief executive of DFC Global, owners of Dollar Financial, operators of The Money Shop.

The appointment followed Dollar Financial’s agreement to refund over £700,000 of interest and default charges to 6,247 customers that received loans exceeding the company’s lending criteria. The agreement comes following the FCA’s increased regulations on the payday lending firms.

One Advice Head of Creditor Relations to host MALG Workshop

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The prestigious Royal College of Physicians in Central London shall be hosting the annual MALG conference on 19th November.

Darryl Matthews, Head of Credit Relations at One Advice, is to facilitate a workshop titled ‘Creditors and advisers do now talk together – job done then?’

On the positive potential outcomes of the conference, Mr Matthews said:

“Its aim is to promote communication, best practice, understanding and professionalism among organisations concerned with consumer credit and debt, debt advice, debt collection and related matters. With a wide range of companies represented from most of the big UK banks, to debt collectors, utility companies, the free sector, and government, it is important for Harrington Brooks to be a part of this to enable us to discuss issues that we face and engage in wider discussions about the debt and credit is arena as a whole.”

Debt and Mental Health

The MALG Mental Health Working Party was set up in 2005 in recognition of the increasing incidence of debt problems and mental health conditions. In light of National Stress Awareness Day, MALG’s voluntary guidelines for good practice and awareness of the relationship between debt and mental health are available here.

DEMSA Release Survey Results for HB

The majority of customers said their contract was clear and easy to read.

The majority of customers said their contract was clear and easy to read.

The Debt Managers Standards Association has recently sent through the results of the Customer Satisfaction Surveys they issued to a number of our customers on debt management plans. We were very pleased with the results, which highlighted the clarity and transparency of our service.

Customers surveyed included those that had found us through the internet, the phone directory, and through our affiliates. All rated the overall quality of our service as either “excellent” or “good”. We received some great comments from those questioned, including:

“Well done for your hard work, and thank you all for your help.” “Since I have had my debt management plan, I have felt so much better and my health has improved… An excellent service.”

There were a few things to learn from the survey, including making it clearer that we are members of DEMSA, and that we follow their code of conduct. Being members of DEMSA is an important demonstration of our ethos surrounding treating customers fairly and operating to the highest levels of compliance with regulatory bodies, and it’s essential our customers know that they are in safe hands.