Bailiffs: Regulatory Reform

Justin Madders Excerpts

Wednesday 9th January 2019 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) on securing this important debate and on the way in which she introduced the subject. As we have heard, we have all had many constituents contact us when they have received a bailiff’s letter or had a bailiff turn up at the door. Although we would want our constituents to contact us as soon as possible, when things might be a little easier to resolve, we have to remember that quite often a Member of Parliament is not the first port of call for someone facing a debt situation.

There is the question of household debt, the availability of easy credit and, as we have heard, the way in which a seemingly small debt can spiral out of control once an enforcement process begins, so we need to think about what more we can do to stop debt becoming the debilitating and all-consuming terror that it often is. To paraphrase a former Prime Minister, we should be not just tough on bailiffs, but tough on the causes of bailiffs, but that is perhaps a wider debate for another time.

I appreciate that there are important distinctions between the powers of a bailiff appointed by the court and a debt collector, but are those differences apparent to the public, particularly when someone knocks on the door unexpectedly demanding money? We know bailiffs must provide evidence upon request by the debtors, as well as sight of a warrant providing them with authority to enter, but how many people in such a pressurised situation will have the presence of mind to ask for those things?

We know that, as part of national standards, bailiffs are expected to treat the debtor fairly at all times. However, one recent example that I came across concerned a constituent who was unable to keep up with the payment plan they had previously agreed because they were in poor health and had been unable to work. The bailiff’s demand in those circumstances was to actually request that the monthly repayment be doubled. How is that a reasonable request? How is that treating the debtor fairly at all times? The national standards are not legally binding, which is presumably why we see such outrageous behaviour.

[Ruth George]

Will my hon. Friend give way?

[Justin Madders]

I am sorry; other people want to speak, so we have to move on.

An even worse example was when a constituent had agreed a payment plan with bailiffs, which she was paying on time and in full. She then received a letter from the bailiffs requesting that the repayment increase by £30 a week. There never was and has not been any justification given for that proposal. Following that request, and despite the constituent asking for an income and expenditure form to demonstrate that she could not afford the increase, she then received a letter asking that the full debt be repaid within 24 hours or goods would be removed. There then followed the threatening phone calls and visits to the property that we have often heard about. Such despicable behaviour cannot be justified, but in this instance, as in many, the original creditor had washed their hands of the whole business. They do not seem to care how unreasonable, threatening or intimidating the bailiffs get. They just want their money back. Even if they are outsourcing responsibility to recover the debt, they should not outsource their responsibility to ensure that the debt is recovered in a responsible manner.

Demands for unaffordable payment plans are probably the most commonly occurring issue that we get. We often find that bailiffs are unwilling to negotiate and then ask for the full amount owed. They even suggest that debtors should borrow more money to repay the debt. As we have heard, the situation is exacerbated by adding hundreds of pounds to the debt once a visit has been made by a bailiff, which can lead to punitive increases that are often totally disproportionate to the original sum being recovered. I appreciate that those wishing to recover the debts need to recover their own costs as well, but the fees, which are then treated as part of the debt, cannot make it any easier for the individual to repay the debt.

In conclusion, I support Citizens Advice’s call for the Government to report annually on the debt to Government and essential service providers, and for the introduction of an independent regulator for the bailiff industry. It is time we gave people confidence that the difficult issue of debt enforcement will be given the same checks and balances that we rightly expect in many other areas of our lives.

[Mr Nigel Evans (in the Chair)]

If hon. Members aim for the three-minute mark, perhaps we will be able to get in everyone who wants to speak.