Bailiffs: Regulatory Reform

Ruth George Excerpts

Wednesday 9th January 2019 Westminster Hall

[Rachel Maclean]

Absolutely. I have visited the company, which is a long-standing employer in the constituency. People have worked there for many years, starting their careers in that business. The company takes that very seriously, otherwise it would not have loyal employees for such a long period who care about doing their jobs properly and respectfully and about treating their clients with dignity in extremely difficult situations. That gives further assurance that there is proper oversight.

[Ruth George (High Peak) (Lab)]

Will the hon. Lady give way?

[Rachel Maclean]

I am sorry, but I need to conclude. I know that people want to speak. I very much support the calls for an independent regulator.

[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.

--- Later in debate ---

[Gloria De Piero (Ashfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. This has been a fantastic debate from which I have learned a great deal.

I am pleased that my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) secured the debate to shine a light on the case of her disabled constituent, who thought she was being burgled when debt collectors forced their way into her home without showing ID, and stole cash from her purse. As we know, that was not an isolated incident. The hon. Member for Harborough (Neil O'Brien) described a case where constituents of his suffered total humiliation. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) talked about threatening and intimidating behaviour, and my hon. Friend the Member for Great Grimsby (Melanie Onn) spoke of vulnerable constituents receiving threatening letters and living in fear and anxiety.

My hon. Friend the Member for Croydon Central (Sarah Jones) spoke about the tragic death of Jerome Rogers. That should concentrate all our minds on the importance of this debate. Jerome was a young man with plenty to live for when he took his own life, but it seems he felt that he just could not go on in the face of the stress and despair he felt after months of interaction with bailiffs. Looking at his story, it is striking how unfair and pointless his treatment was. He was struggling with debt and trying to get out of it, but the odds were stacked against him.

Two unpaid £65 traffic fines spiralled to debts of more than £1,000 in a matter of months. Sky-high bailiff fees meant that there was virtually no cap on what they could take from Jerome. Knowing he could not cope with the debt and the eye-watering fees, he contacted the bailiff company and the individual bailiff dealing with his case, asking to set up an affordable repayment plan. He was met with a flat refusal and little to no human compassion. At least he could earn some money using his motorbike to deliver blood supplies to London’s hospitals—but no. It seems that the bailiffs were systematically cutting off every escape route he could think of. They clamped Jerome’s motorbike, despite the fact that its value fell far below the £1,350 threshold for seizing or taking control of goods. Not only did Jerome have no money and no agency to solve his problems, but he had the added pressure of the intimidating presence of a bailiff outside his home. The stress was unimaginable, and ultimately Jerome just could not take it anymore.

As many people have said, we are not talking about a one-off case, or a few rogue bailiffs and their firms. Recent research from Citizens Advice shows that one person in three has experienced bailiffs breaking the rules, and half of StepChange Debt Charity’s clients said their bailiff refused to accept an affordable repayment offer. This is a systemic failure in our society that must be dealt with.

The legislation covering bailiffs is complex and fragmented. It has failed to protect vulnerable people going through hard times from aggressive and intimidating behaviour. There were some positive measures in the 2014 reforms to taking control of goods, but they just have not worked. It seems that bailiffs are ignoring many of the provisions, as they did when seizing Jerome’s motorbike, refusing affordable payment plans or engaging in threatening behaviour. We cannot allow the bailiff industry to continue marking its own homework.

[Ruth George]

I have had similar problems in my constituency with the bailiffs hired by my local council. Bristow and Sutor—a company that the hon. Member for Redditch (Rachel Maclean) mentioned—uses cameras to take photos of people’s possessions and threatens them with those possessions being sold off if they cannot pay a full demand up front, immediately. It also refuses payment plans. My constituents say its bailiffs have even visited elderly relatives, refused to leave their properties and made them feel intimidated. I am sorry to say that even where we have better practice, with directly employed agents, very serious complaints are still being made.

[Gloria De Piero]

I thank my hon. Friend for that contribution. Story after story shows why reform is necessary. Unlike similar industries dealing with vulnerable people, such as debt collectors, the bailiff industry is not overseen by an independent regulator. As Labour recognised with our successful payday loan campaign, self-regulation is just not suitable for industries with intrusive powers over vulnerable people’s lives, homes and finances. It is just too easy for unscrupulous companies to be greedy or to mistreat people when they are at their lowest. None of the main trade bodies for bailiff companies seems interested in enforcing the law or holding the industry to account, and even if they were, they do not have the teeth to do so, just as we saw with payday lenders.

There is also no simple, accessible complaints system for people to report the horror stories or infringements of the bailiffs they are dealing with. The only thing that will do, as so many colleagues have said, is to replace the broken system of self-regulation and piecemeal reform with independent bodies that will hold the industry to account and allow people’s complaints to be heard and dealt with. We need either a new regulator or to bring bailiffs within the remit of the Financial Conduct Authority—that went a long way towards reining in payday lenders. It does not matter what body we choose as long as it is fully independent and has the teeth and the will to put a stop to unscrupulous behaviour.

We also need a simplified, free, independent complaints procedure, adjudicated by an independent body. We need to listen to the myriad voices calling for change—organisations that in many cases are working on the frontline of the effects of the broken bailiff system. They include AdviceUK, the Children’s Society, Christians Against Poverty, Citizens Advice, Community Money Advice, the Institute of Money Advisers, the Money and Mental Health Policy Institute, the Money Advice Trust and StepChange Debt Charity.

Many colleagues said that the current system is not fit for purpose. The hon. Member for Henley (John Howell) talked about the current system of regulation not working because there are no sanctions, as did the hon. Member for Thirsk and Malton (Kevin Hollinrake), who also brought a mental health angle to the discussions and suggested some practical solutions. My hon. Friend the Member for Leeds West (Rachel Reeves) talked knowledgeably about how the law needs to change, and made a wider point about use of bailiffs being a symptom of increasing household debt. The hon. Member for North Antrim (Ian Paisley) brought a Northern Ireland perspective to the debate and talked about how enforcement orders are used. My hon. Friend the Member for Ellesmere Port and Neston made a wider, and important, point about the need to be tough on bailiffs and tough on the causes of bailiffs. My hon. Friend the Member for Makerfield (Yvonne Fovargue) talked of desperate people chasing desperate people and brought her long-standing expertise to the debate. My hon. Friend the Member for St Helens South and Whiston (Ms Rimmer) talked about how the complaints system is not working and is not fit for purpose, and the wider issue of poverty.

There really is no excuse for the Minister not to act. As the hon. Member for Redditch (Rachel Maclean) explained, some of the bailiff companies are themselves calling for independent regulation. I have a fundamental request. Will the Minister agree to enact a properly independent regulator, and will she set a timetable today to do so? Will she also urge other local councils to follow the example of Hammersmith and Fulham and not use bailiffs? Will she heed the call from the hon. Member for Hendon (Dr Offord) for councils to look at how they deal with repossession and rehousing? Every day that we wait is another day of stress and despair for too many people struggling with bailiffs.