Proposed changes to the law governing bailiffs may change the way consumer debt is pursued, particularly amendments to High Court and County Court Jurisdiction Orders.
While law firm Wright Hassall, which operates a car-finance recoveries service, has welcomed the changes as promoting better ethics among debt collection agencies, Adam Wonnacott, sales director at motor finance debt collection agency the Burlington Group, suggested that the government response to the recent consultation contained a ‘significant opportunity’ for consumer lenders to capitalise on proposals to allow creditors increased freedom when enforcing monetary judgments.
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Although the majority of the response to the consultation did not apply to recoveries by car finance companies directly, "the recommendation within the government response to the consultation to consider amending the High Court and County Court Jurisdiction Order is of critical significance to the consumer finance industry and if change were effected it would almost certainly revolutionise the way in which consumer lenders collect their debt," said Wonnacott.
According to Wonnacott, writing in February’s Motor Finance, the government proposals pertaining to a possible change in the High Court and County Court Jurisdiction Order may allow lenders to employ High Court Enforcement Officers to enforce judgments by entering into payment arrangements secured upon the assets of the judgment debtor. Wonnacott has considered a change in the law would allow creditors to benefit from the same enforcement methods as are being used by local authorities, HM Revenue and Customs and utilities suppliers.
Wider standard
The government’s attempt to tackle aggressive bailiff behaviour, in response to the Ministry of Justice (MoJ) consultation Transforming Bailiff Action, will include banning debt collectors from physical contact with debtors and entering properties at night or where only children are present. National press coverage of the proposals has also focused on their application to the collection of rent arrears.
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By GlobalDataSarah Perry, partner at Wright Hassall’s dispute resolution team told Motor Finance protection of people from aggressive bailiffs was a step toward ending "the unethical practice of the minority and the horror stories which quite rightly attract media attention".
Perry added although the changes would be "nothing more than the adoption of good ethical practices" by bailiffs, they included a new model by which collection agencies’ fees would be calculated.
Reputation protection
In particular, the proposals were "to be welcomed", said Perry, noting that choice of collection agency and their professional behaviour remained "critical to the reputation of our clients".
Perry’s views echo Claire Selvidge, business manager at debt collector Anglia UK, noted in her address to the Finance & Leasing Association (FLA) Annual Motor Finance in November that repossession agents were "an extension" of the lender which employed their services.
As such, debt collectors should be FLA members adhering to the association’s codes of conduct regarding collections which set a benchmark for consumer confidence and verification of agents.
Further comment by Sarah Perry and Adam Wonnacott will be published in the February issue of Motor Finance magazine.
richard.brown@timetric.com
