Industry Thoughts

BUY NOW PAY LATER: WHAT IMPENDING REGULATION MEANS FOR FINANCE PROVIDERS AND CONSUMERS The buy now, pay later (BNPL) sector has been firmly in the spotlight since February this year when the Woolard Review, commissioned by the Financial Conduct Authority (FCA), highlighted the need for increased regulation in this space, to protect consumers from taking on too much debt. Accelerated growth was propelled by the pandemic and unregulated BNPL nearly quadrupled last year, with five million customers having used this kind of payment since March 2020. TransUnion data shows 37% of UK consumers have used a BNPL product at least once within the last 12 months and the expectation is that growth will continue, with this sector globally anticipated to increase by 10 to 15 times its current size by 2025. And it’s not confined to the retail industry. Consumers can spread the cost of purchases with interest-free, short-term credit across all manner of goods and services, even for holidays which now offer ‘fly now, pay later’ options. Credit innovations such as BNPL have proved timely for consumers that have seen their buying power diminished by the pandemic, with TransUnion’s Consumer Pulse study which has been tracking the financial impact of COVID-19 showing that nearly a third (32%) of UK householdsiv are currently negatively impacted. UPCOMING REGULATION Buy now, pay later, or deferred payment credit as the FCA is expected to refer to it, spans several different types of products. Some of these do not currently appear on a consumer’s credit report, and no affordability checks are required to take out the finance, which has given rise to concerns that unregulated BNPL threatens to create a new generation of debtors. The aim of new regulation will be to support finance providers in ensuring payment plans are affordable and sustainable, whilst protecting consumers from the risk of overextending themselves financially. BNPL providers will have access to shared credit report data when making credit risk and affordability decisions, while non-BNPL lenders will be able to view the full extent of a consumer’s financial exposure, helping to guide more accurate assessments. The likely regulation would also bring about a route to support consumers with thin credit files in demonstrating their ability to make timely payments. This will be welcome at a time when economic turbulence means access to borrowing may be crucial for some. GETTING AHEAD OF REGULATORY CHANGES While legislation is not yet in place, with the government and FCA still to consult with stakeholders on this topic, BNPL providers have a responsibility to recognise the roadmap of change ahead and prepare accordingly. The Woolard Review urged the FCA to act “without delay” and, as such, providers are expecting change and should be thinking proactively about their role, putting consumer protection firmly at the forefront and looking to adapt their business models and growth strategies as required. In anticipation of what lies ahead, the Steering Committee on Reciprocity – a cross industry forum made up of representatives from credit industry trade associations, …

THE JOURNEY TO THE FCA’S NEW CONSUMER DUTY Thankfully we are now heading towards the end game of the Covid Epidemic fall out, as the vast majority of UK citizens will have had their two vaccinations by the end of August. At that stage the Government and business alike can take stock and evaluate the new world and whether economic and business models need tweaking, or potential wholesale change. Within the last eighteen months we have seen massive changes to consumers buying and payment methods which will have a far reaching impact going forward. Government, consumer groups and the industry should be working together to ensure that the services and delivery are appropriate, and perfectly fit the consumers’ needs as the momentum to change gathers more speed. The ever constant in this process of post Covid is the consumer who, despite technology, age, and information remains fallible with regard to ‘wants and needs’, especially in an environment that is bombarding potential consumers with wall-to-wall advertising twenty four hours a day. Like it or not, the United Kingdom has an economy built on consumer spending supported by the financial services sector. Enhanced affordability regulations and harsher credit scoring have increased the danger of no access to necessary regulated credit for many consumers. The incessant move to a cashless society, the changes that are occurring to credit cut-off rates, an increased APR, or reduced credit card limits will bring additional stresses and strains to the system. There has been a debate for some time whether financial services firms should be subject to a special duty of care. This is despite the fact that financial services has had tough unrelenting regulatory changes imposed on the market. The FCA has stated that they are under considerable pressure to introduce one. The regulator released a consultation paper in May, CP21/13 ‘A New Consumer Duty’ that would set clearer, higher standards impacting on firm’s culture and conduct. The proposals are far reaching and require the attention of Directors and Senior Managers during the current consultation round, and after implementation. The proposals reflect the approach that the FCA has increasingly taken in enforcing its powers recently, building on Treating Customers Fairly (TCF), which all CCTA members will be very familiar with. Company culture is a subject that exercises the minds of boards across the world, both large and small, as the common rhetoric is that what is measurable is manageable. The CCTA will be responding to the consultation paper and especially in regards to how the FCA plans on measuring culture across such a broad span of companies, and specifically for the proposed measurement processes. The FCA has said the Consumer Duty would not remove consumer responsibility for any decision-making or prevent consumers making decisions not in their best interests or apply retrospectively to past business. We will be asking for clarification from the FCA on what exactly this means. As all members will be aware, the CCTA has been a leader in the Access to Responsible …

The fair treatment of vulnerable customers is a key issue for the financial services industry. The coronavirus pandemic has moved customer vulnerability further up the priority list with the Financial Conduct Authority’s guidance in the UK bringing some welcome clarity and structure to a foggy issue. So how can organisations ensure they’re treating customers fairly and dealing with every customer according to their individual needs? IDENTIFY ANY ISSUES The number one priority for firms is to ascertain exactly what their customers need. Some customers may not be aware that they have any specific requirements, while others may not wish to disclose any needs, with some actively try to hide their situation. It’s vital that front-line employees have the skills and tools at their disposal to identify any undisclosed or hidden needs and record these needs accurately. This includes picking up particular verbal clues or behaviors, listening for background noise which might indiciate a specific need and recognizing a customer’s inability to understand certain information. Seemingly insignificant details can reveal hidden insight, making it imperative that all potentially useful information is logged accurately. ROBUST RECORD KEEPING How data is logged is vitally important. Disparate systems and silos of information can deliver an incomplete picture of the customer. It’s possible to build up a comprehensive picture of the customer with a centralized complaint management system that captures every customer interaction across multiple communications channels. The result is a single version of the truth for every future interaction, ensuring employees have access to a holistic view of the customer at any one time. This record of all interactions can uncover further specific needs with patterns of behavior helping to identify any issues that need to be considered when dealing with a particular customer. Accurate and consistent recordkeeping has been particularly useful this year. The pandemic caused many consumers’ situations to change almost overnight. Those who may not have had any specific needs or requirements are now in a completely different situation. This is crucial for businesses to understand and record so they can tailor responses and behavior accordingly, looking at past and present interactions to provide a fair service representative of changing circumstances. PUT IT INTO PRACTICE How can businesses ensure it’s used once information is logged? A comprehensive picture of a customer’s specific needs isn’t useful unless it’s put to good use. Using data to inform all interactions is key. The right complaints management system puts necessary workflows in place to ensure certain measures are adhered to. Some customers may need written correspondence communicated to them verbally as well or others may require a larger font size. Some consumers may be eligible for payment breaks or additional financial support, while others could require the help of a specialist department to deal with their current situation. By embedding policies and key considerations into organizational frameworks and case management lifecycles, it keeps the issue of fair treatment at the forefront at all times. QUALITY CONTROL Mistakes can still be made and customers still slip …

The failure by a broker to disclose to a borrower that the lender will be paying commission to the broker can in certain circumstances enable the borrower to unwind the loan, without having to pay interest and the lender having to pay the commission to the broker. In March 2021, the Court of Appeal lowered the bar for borrowers seeking such relief. COURT OF APPEAL’S JUDGEMENT The appeal raised three issues: (i) Is a fiduciary relationship between borrower and broker a necessary pre-condition for the grant of relief against the lender? (ii) Did a fiduciary relationship exist between the borrower and the broker? (iii) Are the commissions that were paid ‘half-secret commissions’ (i.e. where the borrower knows that a commission may be paid but not the amount)? FIDUCIARY RELATIONSHIP? The CoA confirmed that it is not necessary to establish a fiduciary relationship where the broker is under a duty to provide information, advice or recommendation on an impartial or ‎disinterested ‎basis. BROKER’S DUTY? On the broker’s terms and conditions and the court’s findings of fact, the broker “…was under a duty to make a disinterested selection of product to put to its clients in each case”. SECRET COMMISSION? ‎The borrowers knew, or would have known, had they read the broker’s terms of business, that the broker might be paid fees by the lender. The borrowers were not told the amounts. Where commission is half-secret, the court has a discretion to award the most appropriate remedy, which could (but would not necessarily mean) unwinding the loan. The broker’s terms and conditions stated the broker “may” receive fees from lenders and the broker “will” tell the borrower of any such amount. The Court concluded that these terms “…imposed an unqualified obligation on the broker to inform the borrower, before a mortgage was taken out, of the amount of the fee”. The court held that, absent the required notification, the borrowers did not know that commission might be paid and were entitled to conclude that no commission was to be paid. SUMMARY This decision is a reminder to lenders of the need to ensure that any commission payable to a broker is adequately disclosed to the borrower. If a broker is under a duty to provide information, advice or recommendations on an impartial or disinterested ‎basis and fails to adequately disclose commission payable by a lender, a court may unwind the loan with the result that: (i) the borrower will have to repay the loan to the lender (without interest); (ii) the lender will have to repay any payments made by the borrower together with the commission paid by the lender to the broker. Lenders should: (i) review their process to ensure that any commission payable to a broker is adequately disclosed to the borrower; and (ii) consider whether their trading agreements with brokers afford adequate protection (e.g. by way of an indemnity) should a borrower claim rescission following a broker’s failure to disclose. The decision related to a secured loan but applies …

Lenders’ being subject to regulatory obligations for oversighting their credit brokers are nothing new – the OFT “Credit brokers and intermediaries guidance” in 2011 set out the expectation for lenders to take responsibility for the actions or omissions of their brokers and take reasonable steps to satisfy themselves that business associates (including brokers) weren’t engaging in unfair business practices or acting unlawfully. Since the FCA became responsible for regulating consumer credit in April 2014, lenders have had obligations under CONC to oversight their brokers and ensure they have the correct permissions. Broker oversight has therefore been a key regulatory focus for some time, but never has it been a hotter topic or indeed more apparent that there is a gap between what lenders are doing in practice and what the FCA expects of them. To stretch the public transport theme of this article’s title – we have waited some time for a communication from the FCA on what their expectations are for oversighting credit brokers and where they see issues in the market, and now lots have arrived at once. FCA LETTERS AND BROKER SURVEY The FCA’s Dear CEO letter to Third Party Finance Providers and their Credit Broker Portfolio Letter both give an insight into where the FCA sees potential problems for lenders and their brokers. In life monitoring and controls, ongoing training of intermediary staff, broker involvement in the customer journey and clear customer communications are particularly prevalent themes. In addition, the FCA has recently kicked off their credit broker survey, which it appears will be used to gather information to help the FCA understand to what extent brokers hold the incorrect credit broking permission or in fact hold unnecessary permissions. REGULATORY CHANGE Sitting alongside this direct intervention and communication with the market are a number of other regulatory initiatives with implications for credit brokers. One outcome of the Woolard Review will be the bringing of exempt buy now pay later lending within the regulatory perimeter, which it is anticipated will lead to up to 60,000 new firms carrying out the regulated activity of credit broking. A large proportion of those firms will be retailers, some of whom will have very little historic or sophisticated understanding of what operating in a regulated space entails. When the FCA finalises its approach to the new Consumer Duty in 2022 we may also see a widening of the broker oversight regulatory “gap” for some firms, as the FCA’s current proposals are broad enough to re-inforce the obligation on lenders to take responsibility for their intermediaries and the way they interact with customers. COMMISSION DISCLOSURE Finally, the FCA’s new rules in CONC earlier this year imposed additional commission disclosure requirements on credit brokers. Lenders and brokers alike have been grappling with how best to comply with those requirements. That has been further complicated by the recent Wood & Pengelly Court of Appeal judgment on commission disclosure. That follows a long line of previous commission disclosure cases, but it has really served to …

Over the last two years we have seen the government make a huge shift towards helping debtors manage their finances and their mental wellbeing.  While this is fantastic for debtors, creditors are forced to jump through more hoops and over more hurdles to bring the cash in. Below are a few of the changes and what creditors must do to stay compliant: 1. DEFAULT NOTICES One of the first changes was to Default Notices sent to customers under a regulated agreement (set out in the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020) effective from 2 December 2020. For over 40 years a default notice followed a prescribed form required by the Consumer Credit Act 1974 but it was felt this had a negative impact on a debtor’s wellbeing and thus changed to be more user friendly.  The changes were predominantly in relation to font and not using SHOUTY CAPITALS.  It did, however, double the period before a creditor can take action and highlighted the use of the 1/3 rule. 2. BREATHING SPACE We then saw the new Debt Respite Scheme, known as a Breathing Space, come into force on 4 May 2021 whereby The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 gives an individual in debt the right to legal protection from creditors.  It does not apply to businesses. There are two types: ‘Standard’ and ‘Mental Health Crisis’. For both, the creditor must pause contact, enforcement and freeze interest and charges on debts.  A debtor is allowed one Breathing Space in each 12-month period so it is likely that several Breathing Spaces could be granted over the life of an agreement. Whilst most debts fall into a Breathing Space there are some exceptions i.e. secured debts, child maintenance and student loans.  A full list of exceptions can be found on the government website.  Any new debts incurred during a Breathing Space are not qualifying debts, neither are new arrears on a secured debt. In a recent case of Axnoller Events Ltd v Brake and another (Costs) [2021] the High Court dealt with a point relating to costs and Breathing Space. The Court had ordered the Brakes to pay costs on an indemnity basis, to be assessed if not agreed.  When it came to assessment, Mrs Brake alleged that Mr Brake had entered a Mental Health Crisis Moratorium and making an order for costs would affect his mental health. The Judge reviewed the regulations and found the word “Debt” was not defined in the regulations. The costs order was made several days before the moratorium but did not create a debt, only an unliquidated, contingent liability.  The Judge decided that any costs order made now ordering a sum to be paid on account would create a qualifying debt, but not a moratorium debt.  It therefore made a costs order against the Brakes. Remember, when a Breathing Space ends, a creditor can commence recovery unless a DRO, IVA or …

In May, the Financial Conduct Authority (FCA) published its Consumer Duty Consultation (CP21/13), with an aim to set higher expectations for the standard of care that firms provide to consumers. These proposals will significantly raise the expectations placed on firms in terms of monitoring and increasing standards to create better customer outcomes. Naturally, responsibility for ‘accountable individuals’ will increase too. Below, we explore these expectations and look at how long firms have to prepare for the potential changes. UNDERSTANDING THE PROPOSALS The FCA believes that consumers’ ability to make good decisions can be impacted by various factors, including their weaker bargaining position, irregularities of information, lack of understanding or behavioural biases. As we know, these factors can be intensified when customers are vulnerable. As a result, the FCA is placing greater pressure on firms to introduce a higher level of consumer protection in retail financial markets, where they are often competing vigorously in the interests of consumers. This new ‘Consumer Duty’ will hold firms accountable to a higher standard of care and will likely require a significant shift in terms of both culture and behaviour. However, for firms that get it right, this new requirement could be an opportunity to not only retain customers by providing good outcomes, but also to differentiate themselves from the competition on customer service. WHAT IS THE CONSUMER DUTY? According to the FCA, the Consumer Duty will require firms to: Ask themselves what outcomes consumers should be able to expect from their products and services Act to enable rather than hinder these outcomes Assess the effectiveness of their actions The Consumer Duty consists of three key elements; the consumer principle, the ‘cross-cutting rules’ and the ‘four outcomes’. Let’s dissect these further. The consumer principle will set out a clear tone for firms and the language used will reflect the overall standards of behaviour the FCA will come to expect moving forwards. For example, the wording being consulted on is ‘A firm must act to deliver good outcomes for retail clients’ or ‘A firm must act in the best interests of retail clients’. Developing on this, the ‘Cross-cutting Rules’ provide guidance on how businesses should be conducting themselves in practice. For example, the FCA expects firms to: Take all reasonable steps to avoid foreseeable harm to consumers Take all reasonable steps to enable consumers to pursue their financial objectives To act in good faith These behaviours will be expected to be enshrined in all activities – from high-level strategic planning to individual customer interactions. Lastly, the ‘Four outcomes’ is a suite of rules and guidance that set more detailed expectations for firms in relation to key elements in the firm-customer relationship – Communications, Products and Services, Customer Service, Price and Value. NEXT STEPS The FCA is inviting feedback on their consultation paper by 31 July 2021. We would advise all firms to read the paper, regardless of whether they wish to feedback or not, as something that could impact governance, culture and process moving forwards. The FCA then …

I recently had the pleasure of hosting a Summit wholly dedicated to Vulnerability. It’s clear that vulnerability is high on the agenda for all of us, particularly with the potential debt tsunami which is threatening to arrive, but are we doing enough? To use a phrase used by one of the speakers at the event, “We need to understand more, care more and do more”. Pre and post COVID, one thing that remains is the significant number of vulnerable consumers struggling to interact with financial services. The FCA Financial Lives Survey reports there are around 24m adults displaying characteristics of vulnerability; 45% of those with low financial resilience, that’s almost 11m UK adults. The report goes on to quote that 57% of people with low capability about money and finances felt overwhelmed or stressed speaking to financial service providers. 16% of the same group felt they had fallen into debt which may have been avoidable, if they had better understood their options. These are some eye watering stats and hints towards the fact that more can, and should, be done. The FCA gave a very clear message that we MUST all be able to demonstrate how we are giving vulnerable customers a fair outcome. Identifying needs, training teams and measuring capability, supported with ongoing monitoring and evaluation. It’s actually just good business practice when you think about it, and they’ll continue to hold us all to account and follow up with an evaluation in 2023/24. Data sharing was another hot topic at the Summit, as there would be an obvious benefit to consumers – but only if we get it right. There’s a lot of work to do to iron out the practical challenges with a ‘single data source’, but one that certainly needs investigating more. Organisations should be looking into how they can work better with their partners and peers in the industry, to confidently and compliantly share data, to improve the overall experience of our customers. Of course, it’s not only our customers who can be vulnerable and need our care – our colleagues are also at risk and need attention. As leaders, we need to share our lived experiences and ensure we’re creating open environments for our teams, to feel they can talk openly and share their circumstances, so we can help from the inside out too. It’s important to empower our teams, and sharing these highlights should bring them to the forefront of our minds when designing processes, agreeing customer outcomes or talking to partners about the need to deliver exceptional outcomes for all customers – particularly those demonstrating signs of vulnerability. Denise Crossley CEO Lantern

During the COVID-19 pandemic, 68 percent of small and medium businesses in the UK reported a negative impact on cash flow, and, for any business where success is built on supplying funding to others, having access to working capital is crucial. Without it, finance providers are limited in the levels of business they can underwrite and could find their business development efforts shackled. Losing out on new credit and loan customers because the funding is unavailable is a tough pill to swallow at any time – but especially in the current climate when revenue and new business are hard to come by. Improving efficiency in the way businesses manage money can have a huge impact, and there are several tricks they can deploy to help improve business fluidity. Lenders today operate in a fast-evolving digital landscape, and it’s tough to keep up with the rapid pace of innovation. Working with external technology partners who can help them to optimise all parts of their value chain is a smart approach, providing them with the agility, expertise, and data to react quickly to opportunities and gain a competitive advantage. Harnessing technology enables lenders to get funding to customers quickly. Digital advertising, applications, AI and data, credit decisioning, and auto-boarding, along with fast cash disbursement systems like Visa Direct and Mastercard Send, mean the lead-time for a new customer to have funds in their bank account can be seamless and almost instant. But that’s only the start of the journey – now you need to be paid back. And when a customer starts to pay down their loan, you need to make sure their payments are approved, processed, and can be turned into working capital for your business as quickly as possible. We work with lenders to help them optimise their revenue by improving their payments processing. These businesses really value tools that help them understand why payments have been declined and partners who tailor their service and commercial arrangements to their circumstances. 42% of the businesses we surveyed believe that technology-led innovation to improve cash flow is a top priority. Reducing declines is one way of dealing with this but speeding up payments for the majority of transactions that go through successfully has the potential to make a massive difference. Being able to accelerate card payment settlement on demand is a valuable tool: Cashflows’ research shows that 3 in 5 businesses believe that a method of faster settlement would improve their payment process. In a world of real-time everything, waiting days for funds to settle feels like something from another age. The good news is that you no longer need to wait because settlement on your terms is now a reality. Statistics sourced from a recent Cashflows whitepaper. Nick Dobson Head of Direct Sales Cashflows

The England Illegal Money Lending Team (IMLT) are a specialist unit that investigate cases, prosecutes illegal lenders and provides support for borrowers in need of assistance. IDENTIFYING ILLEGAL LENDERS What proportion of the public are able to identify an illegal money lender? It’s easy to spot the clichéd characters we’ve all seen in films and soaps, the ones who generously offer loans only to turn nasty when a payment is overdue. They typically come in two forms, either the 1950’s conman or the slick gangster. However, the IMLT can testify that illegal lenders operate in any area and can look like anyone. They will be a borrower’s best friend only for the dynamic to change rapidly when a payment is missed. Cath Wohlers, LIAISE Manager with the IMLT says, “The IMLT rely on partners to spot the signs that someone might be involved with an illegal money lender. These signs can include: •  no official paperwork such as a contract or receipts for payment • interest rates may fluxtuate dependant on the lender’s mood •  borrower’s items such as jewellery, passports or bank cards may be kept as security ILLEGAL LENDING BEFORE LOCKDOWN Before lockdown, any public place in the local area was a feasible hunting ground for illegal lenders. Communal places such as the school gates, shops, pubs, clubs, bingo halls, and places of worship were all ideal. In reality, illegal money lenders operate in any environment where people come together to socialise. ILLEGAL LENDING DURING LOCKDOWN The lockdown abruply closed the usual workplaces of illegal lenders. However, like many of us, they have adapted to working online and social media platforms are their new base of operations. Loan sharks have even turned to online dating sites to target victims. The IMLT has received reports of illegal money lenders preying on people looking for love online during lockdown. The criminals are setting up dating profiles to lure victims into fake romantic relationships, only to then trap them in a dangerous cycle of debt. One victim was tricked into taking out a loan after telling her new love interest about her financial problems. She initially borrowed £3,000 but her debt soon spiralled out of control. She contacted the IMLT for help when the loan shark demanded £10,000 and sexual favours to pay off her debt. In other cases, borrowers have told the IMLT they have been blackmailed by loan sharks on social media sites used by the LGBTQ community. The illegal lenders have gone so far as to threaten to share private photographs if the victim fails to pay their debt. PROSECUTING ILLEGAL LENDERS As well as prosecuting illegal lenders under the Financial Services and Markets Act, the IMLT will use the Proceeds Of Crime Act legislation to take away criminal gains from illegal lenders. Any money received by the IMLT is then ploughed back into local communities with the aim of preventing people being targeted by illegal lenders. In the last three years over three quarters of a million …

Registry Trust maintains the Register of Judgments, Orders, and Fines for the UK and Ireland. We hold historical and ‘live’ data on monetary County Court Judgments (CCJs), which provides a picture of indebtedness and creditworthiness at a national and regional level and can be used to inform responsible lending and borrowing, policy making, and business decisions. Since the onset of the pandemic, we have been analysing and sharing this data in different ways to try and help shape the economic recovery strategy. In October 2020, we hosted a roundtable discussion with key stakeholders including the Financial Conduct Authority (FCA), Fair by Design, Equifax, Experian, Financial Inclusion Commission, Lending Standards Board, Finance and Leasing Association, UK Finance, Cabinet Office, Money and Pensions Service, University of Lancaster, the Consumer Council of Northern Ireland, and others, to discuss how we could build back an inclusive economy from both a macro and micro economic, and household perspective. This looked at the impact of increasing inequality as a result of Covid-19 and the vital role of access to affordable credit as a key driver in inclusive growth. We know from our role maintaining the Register of Judgments, Orders, and Fines, how an unsatisfied CCJ or other blip on a credit record can lead to increased financial vulnerability as a result of inability to access credit and we strongly believe that educating and supporting people to not let the situation escalate is vital. We have also been campaigning for changes to the CCJ process that will make it fairer for consumers and businesses by holding claimants to account and ensuring that having a CCJ ‘satisfied’ is not overlooked. This is all part of building consumer and business financial resilience which will not only help to boost economic recovery, but also ensure that they are not as vulnerable to future crises. Through our regular data analysis blogs, we’ve been able to identify trends and ‘hotspots’ by mapping judgment levels and value against other data and policy changes, from availability of debt advice and child health deprivation, to Universal Credit and Brexit. Most recently, we’ve been looking at the likely impact of the implementation of the Debt Respite (Breathing Space) Scheme and at the rise of ‘buy now, pay later’ product use. All of this is helping to bring CCJ data to life by demonstrating how it can be an indicator of emerging issues. When it comes to Covid-19, we can also use our data to learn from past mistakes. This recession is likely to be like no other we have previously experienced, but there are trends that we are already seeing which mimic what has gone before, and these can be used as a warning sign for what not to do when it comes to lending, borrowing, and economic policy. We also have a new opportunity to educate a new demographic of people who have never been in debt before to seek help and resolve issues as early as possible. Our public facing website TrustOnline allows anyone …

Evidence continues to emerge demonstrating the scale of the crunch on household finances and its likely consequences. The March Budget brought welcome news of extended supports and measures, now lasting until September 2021, which will assist household’s finances as the UK moves onwards from a deeply challenging year. However, the picture of the sheer depth of issues which are forthcoming remains a concerning one. Since March 2020, 11.1 million households have accumulated £25 billion in debt and arrears due to the pandemic, an average of £2,300 per affected household. 460,000 private sector renters were behind on their rent in January 2021, while 2.3 million people have fallen behind on their broadband bills, with internet connectivity having progressed from its previous perceived status as a luxury to an essential utility. As in previous months, these numbers showing hardship, stand alongside those indicators which show financial improvement for the households where members have stayed employed and saved money during the pandemic. The average household savings rate was 16.5% in Q3 2020. Meanwhile outstanding credit card balances fell by 22.4% in the year to January 2021 and the average first-time buyer house price rose by 6.8% in the same period. Michelle Highman, Chief Executive of The Money Charity says: “While the extended support measures announced in the Budget are very welcome, increased debt levels and evidence of financial hardship suggest that new forms of creative support will be sorely needed in the year ahead. “The numbers of those in difficulty are alarmingly large, in the hundreds of thousands if not millions, meaning that maintaining ‘business as usual’ support just won’t be sufficient. For the UK to continue developing its Financial Wellbeing, it is imperative that we avoid a household insolvency and eviction crisis, by ensuring that people are supported to keep their homes and incomes until the economy has had time to fully recover.” Other striking numbers from the March Money Statistics: Net lending to individuals and housing associations in the UK grew by £76.8 million a day in January 2021 •  in Q4 2020 lenders wrote off £960 million (of which £292 million was credit card debt, amounting to a daily write-off of £3.2 million) •  at the end of January 2021, outstanding consumer credit lending was £199.4 billion, falling by £2.8 billion on the revised total for the previous month •  £2,300 average increase in debt and arrears since March 2020 among those who have fallen behind on bills or borrowed for essentials • £3,763 total unsecured debt per UK adult in January 2021 •  -22.4% change in outstanding credit card balances in year to January 2021 •  360,000 increase in unemployment in the year to January 2021 •  citizens advice bureaux in England and wales dealt with 1,616 debt issues every day in the year to February 2021 •  Borrowers paid £122 million a day in interest in January 2021 •  Government debt increased by £789 million a day in the year to February 2021. Get the full picture and …