Taking Control Response to the Ministry of Justice’s Call for Evidence on Bailiffs
Taking Control Response to the Ministry of Justice’s Call for Evidence on Bailiffs 1.8 MB
Having debts collected by bailiffs is a common experience. In 2017 local authorities alone used bailiffs to collect debts 2.3 million times. When people have debts enforced by bailiffs they are often experiencing severe financial difficulty and have other vulnerabilities. It is vital therefore, that the process of enforcement action is correct and bailiffs act in a sensitive way towards the people whose debts they collect.
Unfortunately, as this call for evidence 1.8 MB shows poor practice is widespread. Such inappropriate behaviour by bailiffs is expensive, makes people’s debt problems worse, and exacerbates their vulnerabilities. Yet, the bailiff sector does not have the independent oversight and effective consumer protection that have been commonplace in other sectors for many years. This call for evidence is the opportunity to introduce the regulation the industry needs to protect people in vulnerable circumstances from bad practice.
Reforms introduced in 2014, while largely positive, have failed to improve the behaviour of bailiffs. Systemic problems in the market mean bailiffs and bailiff firms are regularly breaking the new rules and revised National Standards introduced in 2014. Strikingly, since 2014, the nature of problems caused by bailiff behaviour has remained static and debt advisers were more likely to say bailiff behaviour had worsened since the reforms were introduced in 2018 than they were in 2015.
Bailiffs continue to break the rules and treat people in debt badly
Last year Citizens Advice helped 41,000 people with problems caused by bailiffs and the bailiff pages on its website were visited more than 140,000 times. Not all of those problems are because of bad practice by bailiffs, but a significant proportion are. Our independent polling conducted by YouGov, found that more than 1 in 3 people contacted by bailiffs in the last two years report an incident which would constitute rule breaking:
18% witnessed bailiffs treating someone with an illness or disability unsympathetically;
18% experienced bailiffs threatening to break into their home where they did not have the power to do so,
11% saw bailiffs take control of goods required for their livelihood; and
6% saw a bailiff actually break in where they did not have the power to do so
The problems caused by bailiffs disproportionately affect vulnerable people
Bad practice and rule breaking in the bailiff sector is particularly concerning because the people affected are often vulnerable. Of the people Citizens Advice helped with bailiffs last year, 40% had a disability or long-term health condition.
The rules to protect vulnerable people - that say bailiffs should be trained to recognise and identify vulnerability and should withdraw and alert the creditor to a potentially vulnerable person in debt - aren’t working. 7 in 10 people in debt with mental health problems say that their vulnerable status was not dealt with appropriately.
Even where the rules are clear - they’re still being broken
Bailiff rule breaking is not a product of too few rules or a lack of clarity of those rules. The notices bailiffs send people at different stages of enforcement are prescribed in regulations. Despite this, bailiffs frequently send additional notices which do not conform to the prescriptions. A sample of letters and texts shared by advice organisations (see section 4) show that bailiffs frequently misrepresent their powers and threaten people in debt with prison without putting that escalation in context.
Bad practice by bailiffs has knock on effects on people’s lives
Having debts collected by bailiffs is always likely to be unpleasant - 83% of National Debtline callers who had experienced bailiff action reported a negative impact on their wellbeing. And when bailiffs break the rules and treat people unfairly, this detrimental impact can take particularly distressing forms. 7 in 10 people who see bailiffs break the rules said that they experienced increased stress or anxiety, felt unsafe or became afraid to answer the door. The impact on people’s sense of independence is particularly damaging. A third of people said a negative interaction with a bailiff made them feel unsafe in their own home and one in four said it made them scared to leave their home.
Oversight of bailiff behaviour is out of step with other sectors
The extent of rule breaking by bailiffs is driven by the lack of accountability in the sector. Other sectors where professionals have significant responsibility in relation to people’s wellbeing - from financial services to the police - have independent complaints structures which can look into grave incidents of poor practice. Yet no such infrastructure exists for bailiff firms. This leads to very low levels of complaints. Three quarters of people who have experienced bailiff rule breaking don’t complain at all and the formal process for complaining about bailiff behaviour has only been used 56 times in 4 years. People don’t complain because the system is inadequate. People are encouraged to complain to the firm first - who might refer them to the individual bailiff or even creditor, then to the relevant trade body, and only then through a formal process. Both people in debt and advisers lack faith in a complaints process that is largely industry controlled.
Even when people do complain, the process works poorly. Only 1 in 10 advisers who’ve made a complaint about a bailiff say the process works well. In one case, it took a Citizens Advice client 18 months to resolve a successful complaint and have their money returned.
A lack of regulation means the sector does not improve over time
To bring the enforcement sector in line with other comparable sectors, a regulator is needed to license, supervise, and sanction bailiffs and bailiff firms that break the rules. In addition, a regulator would be able to ensure the sector was continuously improving.
Two long-running problems in the sector highlight the wider need for regulation:
Training and certification: Training standards in the bailiff sector are too low. The level of qualification required to act as a bailiff isn’t sufficient to ensure knowledge of the law or good practice more generally. A regulator would be able to support the industry to improve standards of training and to monitor the impact of that training on bailiff practices.
Fees and charges: The fee structure for bailiffs needs to be reviewed. Currently, it encourages escalation of collection to increase the fees paid by people in debt. 62% of debts enforced by bailiffs go beyond the compliance stage. That means small debts can quickly escalate. Modelling shows bailiff firms have made excess profits since the introduction of a statutory fee structure - with a profit margin as high as 27% compared to a target of 10%.
The Ministry of Justice must not delay the introduction of independent regulation of bailiffs
Bad practice by bailiffs is the result of systemic problems in the sector, not a few rogue bailiffs. While the rules introduced in 2014 were largely positive, a lack of oversight and an independent complaints mechanism mean there is little incentive on bailiffs, or bailiff firms, to follow those rules. Any further iterative changes to the rules that govern bailiffs would likely be similarly ineffective.
The Ministry of Justice should introduce independent regulation and an independent complaints process for bailiffs and bailiff firms. A regulator should be responsible for authorisation, setting standards, supervision, and sanctioning bailiffs and firms. At present, changes to the enforcement industry around issues such as fees come about slowly and involve significant resource. Independent regulation would protect people from rule breaking and find solutions to those problems as well as reduce the risks carried by local authorities and central government when using bailiffs.