THE FULL PICTURE
INCREASING VISIBILITY OF USEFUL CUSTOMER DATA

Registry Trust

It’s those two words again, isn’t it? Consumer Duty. Such innocuous sounding words, and ones that should feel like the natural thing to do for so many organisations and companies out there. But what do those words actually mean, and, crucially, how are they being interpreted?

The premise is simple enough. There are three key elements; the Consumer Principle; Specific Behaviours; and Outcomes. The Consumer Principle aims to improve overall standards of behaviour; Specific Behaviours means that firms need to show they take all reasonable steps to avoid foreseeable harm to customers; and Outcomes means that firms need to ensure their customers receive fair value and fair products, that they understand how to use their products or services and receive support.

So far, so straightforward. The worlds of financial services and customer service have made significant strides since the days of ‘the customer is always wrong’. So what’s the challenge?

Firms need to consider how best they might demonstrate all of the new requirements, against a background of increasing economic turmoil and distress. Inflation is high. Food, petrol and energy bills are seeing price rises at rates that feel unprecedented to the younger generation. Over 4.5 million households are already struggling, demand for credit is rising, as is the level of support needed. Regulators will be looking closely at the world of consumer credit, and industry application of Consumer Duty.

HOW DOES REGISTRY TRUST FIT IN?
Registry Trust are neither a regulator, nor a regulated firm. So why should we care about Consumer Duty? Registry Trust run the Register of Judgments, Orders and Fines, which from an organisation’s point of view means that any kind of financial dispute you have with a consumer may well end up being represented on our public Register. We hold records on all county court judgments (CCJs), (decrees in Scotland) stretching back over the last five or six years, depending on the type of record.

Registry Trust occupies an impartial place in the world of consumer credit and CCJs. We don’t pass judgment on the merits of any CCJ, we simply make sure it is recorded accurately. The link with Consumer Duty obligations and requirements is in our three main campaigns on Get Satisfaction, Partial Settlements and Claimant Data.

Get Satisfaction calls for regulated firms to have the recording of satisfied or fully paid judgments sent through to the courts (and then to Registry Trust) in the same way that firms take out the original judgment. The mechanism for doing so already exists, and does not require structural change for firms, or legislative change for government. What it would do is give firms a way to demonstrate that they were acting in the interests of customers by ensuring they had their records updated when a debt was fully repaid or satisfied.

Partial Settlements are not reflected in borrowing history or credit ratings. If a consumer and a firm come to a financial agreement, the consumer receives no public acknowledgement of the agreement, and therefore limited benefit.

The ongoing perception is that a consumer has made no repayments to a debt which is simply not the case. Our sample studies have shown that there are 4.5 million individual borrowers on the public Register, and c. 200,000 of those borrowers have paid back more than 90% of the original debt owed. This level of repayment is not reflected anywhere. The absence of reliable data has consequences on an individual for up to six years, due to the life of a judgment.

Registry Trust are asking for support in creating a Register of Partial Settlements which would allow better reflection of outstanding debt, and fairer treatment of consumers by the lenders who ultimately use this data to make their credit decisions. A Register of Partial Settlements would allow firms to demonstrate that they were acting in the best interests of consumers.

Our campaign on Claimant Data calls for the names of the firms taking out judgments to be made available via the Register. Crucially, this information is already public data, but it is not accessible in the same way that the remainder of the judgment details are.

This omission from the Register of Judgments, Orders and Fines Regulations 2005, means that regulators are not readily able to see which firms and industries are driving increases in judgments. Nor can economists and policy-makers properly and fully understand changes in economic behaviours and propensity to pay.

Without this data being made available in one accessible place, our ability to fully understand the drivers of credit and debt across the UK remains limited. Supporting this campaign would be a way for firms to demonstrate that they had taken all reasonable steps to avoid harm, and provided full support to customers, prior to taking out a judgment.