Back to the drawing board?
Embracing change in a Consumer Duty focussed industry

Published 08 April 2024

In recent weeks, the FCA joined forces with UK Regulators Network (UKRN) issuing statements around debt collection activity. This ‘activity’ relates to all forms of communication to customers in arrears, be it from lenders, creditors or their chosen third party outsourcers. At a time when the cost of living crisis is biting hard, this is likely to go hand in hand with the ongoing campaign spearheaded by Martin Lewis, in relation to placing a cap on the number of communications allowed to be sent to a customer in any given week, including reminders and regulatory notices. This is a rule already in place in other countries. Imagine yourself as a customer with multiple debts, being contacted by multiple creditors, multiple times a week and it’s easy to see why this has been raised, and indeed where it’s heading. In essence what this means, under the umbrella of the Consumer Duty, is that messaging to customers must be fair, transparent and not misleading. This practice, when undertaken in the correct manner and within the spirit of Consumer Duty can actually enable a company to control costs, whilst improving the overall customer journey. It’s about reviewing every single communication and making sure it offers assistance along the way, encouraging customers to engage. Seven years ago, the FCA focused on the business I had joined to understand the market better, and imposed this similar rule. I can recall feeling how unfair that was when competitors were continuing under the old regime. I make it sound simple. It wasn’t. It was painstaking and an absolute commitment was required, however we were repaid ten fold. However, having agreed to abide by the requirement, we found over time that our bottom line improved alongside increasing our brand and reputation. I make it sound simple. It wasn’t. It was painstaking and absolute commitment was required, however we were repaid tenfold. Changing our CRM system was possibly the biggest and toughest part of the process, as we had to create a Single Customer View to ensure we complied with the new requirement, but looking back it was by far the best move we made. We also reviewed all our processes and communications and adapted them to fit our new system. Following that, we asked our partners to do the same. Anything is possible, but it takes commitment to undertake a thorough review and execute a plan to achieve a great outcome. I cannot stress enough how starting with a review of your systems is key to getting this right. To review your operation effectively to allow this (expected) change to work, it’s wise to look to your Consumer Duty Champion (independent of shareholders and management) who Is experienced and well versed on looking at this subjectively, as this will assist the business in become a shining star, raising brand, profits and ensuring customer delight.

DIGITAL LENDING
REVOLUTIONISING FINANCIAL ACCESS AND EFFICIENCY

ARYZA

Published 08 April 2024

In the dynamic landscape of lending, the fusion of technology and financial services is reshaping traditional practices, ushering in an era of digital lending. Historically, the lending sector in the UK has been dominated by traditional financial institutions, however, with the advent of advanced technologies, the industry is experiencing a profound transformation. Today, lending encompasses various categories and forms, ranging from mortgages to personal loans, each catering to diverse borrowing needs and preferences. Amidst this diversity, the shift towards digitalisation and automation is gaining momentum. Financial service providers are actively embracing automated models, propelled by the increasing prevalence of digital interactions, particularly accelerated by the COVID-19 pandemic. The magnitude of outstanding loans underscores the critical role of lending in supporting individuals amidst financial challenges. As borrowers navigate the borrowing cycle, the need for efficient and accessible support becomes more pronounced. Digital lending emerges as a response to these evolving needs, offering a progressive and adaptable framework that aligns with the demands of the digital age. By leveraging technology, digital lending addresses longstanding challenges encountered in traditional lending models. Digital lending is not a trend but a transformative force reshaping the financial landscape. One of the primary advantages of digital lending is its ability to enhance the customer experience. Through apps and online platforms, borrowers can seamlessly access credit facilities from any location, streamlining the application process. Digital lending facilitates quality decision-making by leveraging data analytics to gain insights into individual customers, enabling lenders to make informed decisions regarding credit approvals, income verifications, credit scoring, and loan outcomes. Cost efficiency and effective time management are additional benefits. By integrating digital solutions into their processes, lending companies can optimise operational costs and reduce processing times, thereby enhancing overall efficiency. However, the transition to digital lending also introduces certain risks, particularly in areas such as payments, IT infrastructure, and regulatory compliance. It is imperative for lenders to implement robust risk management strategies to mitigate these risks and ensure the security and integrity of the digital lending ecosystem. The rise of fintech lending is catalysing innovation within the industry. Fintech companies are revolutionising lending processes through the provision of cloud-based software solutions and leveraging technologies such as AI and data analytics to enhance efficiency and security. Digital lending is not a trend but a transformative force reshaping the financial landscape, offering unprecedented opportunities for financial access and efficiency. As we navigate this digital era, embracing innovative solutions and robust risk management strategies will be crucial for ensuring sustainable growth and resilience in lending practices. By championing technology, the industry is poised to meet the evolving needs of borrowers while navigating the complexities of the digital age.

Navigating financial difficulty
A comprehensive guide to customer support strategies

Published 08 April 2024

In the face of escalating living costs, it’s imperative for firms to extend support to customers grappling with financial challenges. The Financial Conduct Authority (FCA) has been proactive in implementing interventions post-pandemic to strengthen frameworks for customer support, aligning with Consumer Duty. Our white paper delves into these dynamics, aiming to aid firms in navigating the complexities of customer collections effectively. ECONOMIC LANDSCAPE The economic terrain post-pandemic has been characterised by soaring inflation rates and escalating domestic expenses. With the Bank of England’s consecutive base rate hikes, reaching 5.25% by November 2023, the affordability of goods and services has diminished, amplifying financial strains for many borrowers. Notably, the FCA’s 2023 Financial Lives Survey revealed a significant surge in missed bill payments, underlining the pressing need for robust customer support mechanisms. REGULATORY EXPECTATIONS In this economic climate, the FCA emphasises fair treatment of borrowers and proactive engagement to resolve payment issues. The implementation of the Consumer Duty underscores the necessity for firms to prioritise customer outcomes throughout the arrears and forbearance journey. However, FCA research indicates that only a fraction of borrowers in financial difficulty receive adequate support, highlighting the gap between regulatory expectations and industry practices. COLLECTIONS BEST PRACTICE & ACTIONABLE INSIGHTS In a recent white paper on Borrowers in Financial Difficulty (BiFD) that Square 4 Partners published, we outline twelve principles encapsulating collections best practices. From proactive customer engagement to transparent fee structures, these principles serve as a roadmap for firms to ensure fair treatment and sustainable solutions for customers in financial distress. Emphasising early intervention, tailored forbearance, and effective staff training, these principles align with regulatory requirements and industry standards. In the face of escalating living costs, it’s imperative for firms to extend support to customers grappling with financial challenges. As firms gear up to tackle the impending “collections iceberg,” proactive measures are paramount. We advocate for strategic initiatives encompassing education, impact assessment, governance enhancement, resource allocation, and talent acquisition. By aligning collections strategies with regulatory mandates and economic forecasts, firms can navigate the challenges ahead and mitigate potential risks effectively. CONCLUSION In a landscape stained by economic uncertainty and regulatory scrutiny, proactive customer support is non-negotiable. By embracing regulatory expectations and implementing robust strategies, firms can safeguard customer interests and foster financial resilience in turbulent times. To dive deeper into this topic, visit our website and download our Borrowers in Financial Difficulty white paper. Our comprehensive paper serves as a guide for firms, offering actionable insights, customer support strategies and best practices to navigate the complexities of collections effectively.

A worthwhile puzzle
Deciphering consumer vulnerability in lending

Published 08 April 2024

As we continue to navigate the cost of living crisis, credit markets are seeing an ever growing number of vulnerable consumers. This is against a backdrop of the FCA’s Consumer Duty obligations, ensuring good and fair consumer outcomes. As an industry, we recognise that addressing consumer vulnerability is more than a regulatory requirement, it’s crucial for the health of both the credit market and consumers. Industry responses need to be about more than just compliance. We must build a financial ecosystem that is accessible, equitable, and resilient – ensuring all consumers, especially the vulnerable, get the care and protection they deserve. This underscores a collective industry effort to foster a fairer, more inclusive credit market. At TransUnion we’ve worked with industry to optimise our rich credit data to understand the scale and spectrum of consumer vulnerability, to help the industry identify consumers who need most support. Our immediate insights focused on the financial side of a consumer’s life, specifically understanding the impact of pressure and stress on disposable incomes. Recently, TransUnion have worked with non-financial vulnerability data via the Vulnerability Registration Service (VRS), who capture an array of self-declared non-financial vulnerabilities such as mental health, disability and gambling addiction. Using VRS data, we get an idea of challenges facing the UK industry. Vulnerability is a broad concept – a significant proportion of the population are impacted in some way and classed as vulnerable at some point in their lives. However, not all vulnerabilities lead to harm, the support the consumer needs could be based around service and accessibility rather than intervention. It’s therefore important to understand the consumer’s position on the spectrum of vulnerability, the likelihood of future harm and the best treatment strategies and appropriate services for them. For example, roughly 16m UK consumers live with some form of disability – for many their greatest need is appropriate access to credit, and efforts to ensure their inclusion (i).  When focussing solely on financial vulnerabilities, 31% of UK consumers have at least one indicator, or to be more specific, 11% of UK adults are experiencing financial distress (ii). We must build a financial ecosystem that is accessible, equitable, and resilient – ensuring all consumers, especially the vulnerable, get the care and protection they deserve. TransUnion can also identify income-based vulnerabilities, with 15m working age consumers falling into the low income bracket (where income is approximately 70% of UK median income). Whilst low income doesn’t always indicate vulnerability, the cost of living crisis has resulted in material stresses on customer’s affordability. We’ve found that approximately 10m UK consumers are in severe income distress, spending everything they earn each month (iii). We have observed good practices across the industry – examples include increased access and usage of non-financial vulnerability data; greater focus on predictive analytics, expanding outcome definitions beyond delinquency and profitability; and re-designing servicing capabilities with specific vulnerabilities in mind. Supporting vulnerable consumers is a non-competitive industry imperative, and as such, we need to collaborate and share best practices – to …

Blue sky thinking
The latest innovations in recurring payments for collections

Published 08 April 2024

In the collection landscape, innovative solutions are continually reshaping the way payments are processed and managed. With the emergence of technologies like Apple Pay Recurring, Open Banking payments, and Direct Debit, Debt Collection Agencies and lenders are streamlining processes and enhancing user experiences like never before. APPLE PAY RECURRING Apple Pay Recurring is just one of the ways borrowers are managing their recurring payments. Leveraging the convenience and security of Apple’s ecosystem, customers can use Apple Pay Recurring through gateways such as Acquired.com. Customers sign up for a subscription using Apple Pay and have the recurring payment collected as a normal Continuous Payment Authority (CPA). Apple Pay’s built-in layers of authentication allow transactions to meet all Strong Customer Authentification requirements, as well as offer a frictionless payment experience for borrowers. OPEN BANKING Open Banking payments are another rapidly growing innovation for the collections landscape. Introducing the option to pay via Open Banking from a different bank account than the one linked to their CPA or Direct Debit allows borrowers to make loan repayments from an account of their choice, enabling them to manage their cash flow more effectively. With Open Banking, debt collection becomes more transparent and efficient, benefiting consumers and collectors. These latest innovations in recurring payments are reshaping debt collection and lending practices, offering enhanced convenience, security, and efficiency. DIRECT DEBIT Direct Debit remains a cornerstone in recurring payments, offering reliability and convenience. With Direct Debit, consumers authorise payments to be withdrawn directly from their bank accounts on specified dates, eliminating the need for manual intervention. This automation reduces the risk of missed payments and late fees, providing peace of mind for both borrowers and collectors. Additionally, Direct Debit offers flexibility, allowing consumers to adjust payment schedules as needed, further enhancing convenience. NETWORK TOKENISATION Acquired.com has seen a notable improvement in success rates of recurring payments with the implementation of Network Tokens, with some customers seeing up to a 4% uplift in success rates (Source: The Acquired.com Hub). If a customer’s card is lost, stolen, or expires, Network Tokens remain usable and update with the new card details in real-time. For lenders processing recurring payments, it means enhanced security, better conversion, and the potential for reduced costs. In the UK, these latest innovations in recurring payments are reshaping debt collection and lending practices, offering enhanced convenience, security, and efficiency. With solutions like Apple Pay Recurring, the option of Open Banking payments, and legacy solutions like Direct Debit, the collections industry is better equipped to navigate the complexities of payment processing, while providing a seamless experience for consumers.

Horizon scanning
The latest regulatory issues affecting our industry

Published 05 April 2024

The industry has become increasingly busy with a range of regulatory issues, which I will touch upon later in this article. To begin with though, I would should start by thanking our members for their continued support. MEMBERSHIP RENEWALS Many firms renew their CCTA membership in January. Indeed, about 35% of our fees are due at the start of the year. So, I was delighted when our renewal rate hit 98%. It has been difficult for smaller lenders, and we have seen more leave than join the market in specific sectors. That makes our retention rate even more of a success. CCTA ACADEMY I am delighted to inform readers that our online learning and development platform, CCTA Academy, has been well-received since it’s launch at the end of last year. The FCA has clarified the importance of your team members having a certain level of understanding. CCTA Academy includes those introductory modules and provides that basic information via a range of courses. We are heading towards 300 enrolments across a range of member firms. Keep an eye on our member communications for more learning and development opportunities from the CCTA ACCESS TO CREDIT CAMPAIGN Let’s move back to policy and campaigns. Anyone who has heard me talk about the CCTA knows that we have a history linked with access to credit. Lenders and retailers came together over a hundred years ago because the banks didn’t provide credit to these communities. Increasingly, I am discussing the need for credit and what we have seen in the reduced supply for specific communities. You may have seen the Clear Score report on the non-prime market. This comes on the back of research from Fair4All Finance and more media interest. Anyone who has heard me talk about the CCTA knows that we have a history linked with access to credit. The CCTA team is looking at how to keep the discussion going and float ideas. We are always open to advice and ideas about how the regulator can help. CONSUMER DUTY On to the Consumer Duty. The Duty continues to be the issue in just about every discussion. There is a reason why the panel sessions at our events have been about the Consumer Duty for the last couple of years. Increasingly, we hear informal comments from the FCA about their concern that firms are still not doing enough about the Duty. While we have had some contact from firms seeking help with the Duty, it is less than we expected. That is partly why we are working on two guidance documents. The first will cover implementation and expectations shared by the FCA. The second will look at the requirements around the anniversary of implementation, such as the board report and closed book review. Look out for these via our member emails. CAR  FINANCE COMMISSIONS Many of you will have seen the attention that Martin Lewis has brought to the issue of car finance commissions. We are already at a point where over a …

FCA regulatory update
Key themes from Martha Stokes’ speech to the 2023 CCTA Conference

Published 27 November 2023

Access to affordable credit allows people to manage their money and helps them cope in tough times. It requires a well-functioning market where customers are treated fairly, supported if they get into financial difficulty and are equipped with the information they need to make good decisions. Ensuring the regulatory framework supports these objectives is key for the FCA. REVIEW OF THE CONSUMER CREDIT ACT In July, the Government confirmed its intention to overhaul the Consumer Credit Act – moving much of the Act into the more agile regulatory framework of the FCA rulebook. This provides opportunity for a more coherent, flexible, less fragmented credit regime – a regime that can facilitate innovation as markets evolve. The FCA will be working with Government through the reform process to ensure consumer credit regulation supports a well-functioning and competitive market, whilst maintaining the appropriate degree of consumer protection. EMBEDDING OF THE CONSUMER DUTY Another significant regulatory change is the Consumer Duty which came into effect at the end of July. The Duty fundamentally changes expectations of the financial services industry by setting higher and clearer standards of consumer protection. It asks firms to deliver good consumer outcomes at every stage, placing consumers’ interests at the heart of businesses. The Duty will enable the regulator and markets to tackle future challenges; to act quicker, without consulting on new rules each time a new problem or opportunity is identified. As markets evolve and new benefits and risks to consumers emerge, the Duty requires firms to act to deliver good outcomes and protect customers from foreseeable harm. Examples of good practice are already being seen, and as firms continue to embed the Duty, the focus should be on those areas that will have the biggest impact on customers. Firms should be considering: is the product or service designed to deliver good outcomes for consumers? what is the target market for this product and are our communications clear to consumers? is there any sludge in the customer journey which interrupts or hinders good outcomes? Are there any barriers to complaints, for example, or unreasonable, punitive extra costs? Firms can expect to be asked to demonstrate how their business model and culture deliver good customer outcomes. The Duty fundamentally changes expectations of the financial services industry by setting higher and clearer standards of consumer protection. Complying with Consumer Duty is about adapting business to meet current and future needs. The rising cost of living, for example, is impacting budgets of UK consumers, putting pressure on their disposable incomes, and pushing more into financial difficulty. People who want to borrow, or have borrowed, will in many cases find it harder to pay off their debts. More customers will become vulnerable. The FCA is therefore asking firms to do more to encourage customers to speak up when they are in financial difficulty, playing a crucial role in engaging these consumers, for example by signposting debt advice services, offering tailored solutions and making sure additional charges are fair. Getting good outcomes …

CCTA Academy
Online learning & development platform launched

Published 27 November 2023

Some of you will recall that, almost a year ago, we carried out a member survey to see how we could further improve our services as your trade association. Over 80% of respondents wanted the CCTA to enhance our learning and development offering. That has led to the launch of the CCTA Academy. As many of you will be aware, the CCTA has been working on introducing our new online learning and development portal, CCTA Academy. Those who attended our annual conference in Manchester in September will have heard me speak about the impending launch of the portal. I am pleased to announce that we have successfully launched CCTA Academy. Some of you could not attend the conference, so I wanted to take this opportunity to tell all our members about the Academy, its features and benefits. Members who register for the Academy will enjoy online compliance training for both staff and managers. The training covers industry-specific modules relevant to our membership, for example, tailored courses such as motor finance, retail finance, pawnbroking, high-cost, short-term credit, home-collected credit, personal loans and guarantor loans. In addition to a tailored course relevant to your industry, the compliance training includes modules on critical legal and regulatory topics. These modules include vulnerable customers, complaints handling, conflict of interests, financial promotions, anti-money laundering, anti-bribery, SM&CR conduct rules, whistleblowing and the Consumer Duty. Whilst these courses are relevant to all staff members, manager training courses also include advanced GDPR, SM&CR for managers and the Consumer Duty for managers. The CCTA Academy portal also has further features and benefits for members to utilise, and I wanted to cover some of those here: CPD ACCREDITATION All our courses are Continuing Professional Development (CPD) accredited. Learners earn CPD points for completing each module. Once completed, learners take an exam, which they must pass at a minimum rate of 80%. Upon completing each exam, the learner gains the relevant CPD points applicable to the module and a downloadable certificate of completion. Members are even able to add external CPD points earned outside the Academy. LIVE LEARNING SESSIONS From time to time throughout the year, CCTA (and its associate members) will carry out live learning sessions on key, trending industry and regulatory topics. All staff and managers signed up can attend these live learning sessions free of charge. These additional sessions help ensure ongoing learning and development opportunities for all registered learners. ADD YOUR COURSES AND CONTENT The portal includes a feature for firms to add your basic courses or content. Whether it is a document, video, audio or PowerPoint file, you can make these available to your staff by adding them to the portal library. ADD YOUR COMPANY POLICIES AND PROCEDURES The portal can also be part of your firm’s onboarding process for new starters and managing existing employees. You can add your company policies and procedures for staff to ‘read and accept’, recording their adherence to the policies and procedures. Over 80% of respondents wanted the CCTA to enhance …

Changing tides?
Cost of living and borrowers in financial difficulty

Published 27 November 2023

Undoubtedly, the Financial Conduct Authority (FCA) is taking the cost of living very seriously. To a certain extent, this is a continuation of a project that emerged from the COVID-19 pandemic. While there has been some good news around the fall in inflation and wage growth, a group of families will find themselves in a difficult position. The cost of living has been the highest public agenda item at times and then fallen away as other issues emerged and inflation started to fall. As winter approaches and energy prices become a more significant factor, we will see pressure increase again, though hopefully, inflation will be less of a feature. There may be a debate about the scale or direction of this issue, but it has been of crucial importance to the FCA. It is a key element within their work on Borrowers in Financial Difficulty. From our discussions with the FCA and our review of their communications, we can see that they want lenders to be more proactive. They push for more customer contact and expect forbearance options tailored to individuals. OUR STARTING DEFINITIONS Returning to the basics, below are the definitions the FCA use for the cost of living and borrowers in financial difficulty. Cost of living: The amount of money a person or household needs to spend on necessities, such as food, housing, and transportation. Inflation has been part of this story. Borrowers in financial difficulty: People having trouble making their loan payments. The idea of borrowers in financial difficulty, as a group, has been around for as long as lending has taken place. It has never been in firms’ interest to lend to those without a chance of paying back. DIFFERENT PHASES However, it was around the pandemic that the FCA used this term more, and it has since then become a standard part of our vocabulary. This FCA focus has continued as we moved into a phase of increasing inflation. There were three critical areas of increase: energy, food, and transport costs. Within those are pressures from the war in Ukraine and the global supply chain crisis. There is also debate over the impact of Brexit. In 2022, we saw this reflected in an inflation rate that reached 11% by the year’s close. However, in discussions with our members, we know that financial position is not as simple as sometimes suggested in newspaper articles. The red flags that we would expect to see have not appeared. (The FCA) want lenders to be more proactive. They push for more customer contact and expect forbearance options tailors to individuals. That may be because we have also seen wages increase. Pay rises have run way ahead of inflation at specific points, which means some families have found themselves in a better position. The issue of inflation may be falling away as we progress to a new phase. However, as we move into winter high energy prices are likely to come to the fore again putting some under strain. WHAT …

All hands on deck
Working with the Financial Ombudsman Service

Published 27 November 2023

At the Financial Ombudsman Service, we’ve been working hard to deliver faster results for complainants and firms without compromising on the quality of our decisions. We are building the service that our customers need and rightly expect, with the flexibility and capacity to deal with the changing landscape in financial services and beyond. Comparing the first half of 2023-24 to the first half of the previous year, we’ve reduced the average number of months we took to resolve cases from 4.8 to 3.2 months; we resolved 56% of cases in three months, up from 30%; and we resolved 82% of cases in six months, up from 55%. We want to do better, and for that we need the cooperation and support of firms. We recently wrote to firms explaining how they should work with us to resolve complaints. Some of the key points identified for building an effective working relationship with our Service include: Sharing early insight with us on complaint volumes – particularly unexpected spikes – helps us ensure the right cases are resolved at a firm’s front-end, and that only the cases that need to come to us do so. Providing files and information to us in a timely manner – means we can get cases resolved quicker and more efficiently. We are now allocating and progressing complaints much more quickly than was the case, but we can only do that when we get a firm’s side of the story as early as possible in the process. Helping us to understand a firm’s perspective – in particular, firms being prepared to ‘show their working’, explain the decisions they’ve made and provide supporting evidence so that we can properly take that into account. Learning from decisions that go against firms – firms might not agree with our decisions and there are processes to formally challenge them where appropriate. But where our decisions stand, firms need to apply the lessons to their business and the way they handle complaints – as required byDISP rule 1.3.2A in the FCA’s Handbook. Engaging effectively with professional representatives –including claims management companies. Our experience is that where firms take an adversarial approach to representatives, this just makes things worse – leading to more complaints, higher case fees and higher uphold rates. We understand the concerns that firms raise with us about professional representatives, and we’ve sent them a separate letter setting out our expectations of them when they refer complaints to us. We work with representatives to ensure that they are bringing only the right complaints in the right way – for example, we’ve prevented thousands of cases from coming to us and incurring charges by making sure that representatives have worked with the relevant financial services firm first. Where concerns or issues remain, we share insights and information with representatives’ regulators. Speaking of regulators, we have done a lot of work with the FCA, along with industry and other stakeholders, to get ready for the Consumer Duty. Like firms, we are ultimately a …

The final countdown
What do the next twelve months have in store for UK politics?

Published 27 November 2023

Everyone knows the saying “a week is a long time in politics” so a year could be considered an eternity. However, I did want to talk about the next twelve months as we head towards the general election and a possible change in government. I think it’s fair to say that the last few years have shown anything is possible in UK politics. Things seem to be very fast moving now, even between starting and finishing this article another government reshuffle took place! SO WHERE ARE WE NOW? Sunak has been in post as Prime Minister for just over a year now. It seems that the strategy was to distance himself from both the “Covid” years under Johnson and the economic disasters under Truss. The Prime Minister has focused in on six key pledges- such as bringing down inflation and reducing NHS waiting lists. Some may be in his gift, but he is running out of time to deliver on others. The focus has been about steadying the ship, appealing to the more centrist Conservative voters and demonstrating that they can continue to be the natural party of government, despite their recent setbacks. The reshuffle also shows a move back towards centre ground with the return of David Cameron and promotion for some of his previous Special Advisors. It also means that we have a new Economic Secretary, the Minister responsible for financial services regulation, in Bim Afolami MP. IS AN ELECTION LIKELY? The Government must call the next general election by the 28th January 2025. Official notice must be given and the Prime Minister is likely to want to avoid the Christmas season, so best guess is that it is likely to take place next autumn, unless his hand is forced into calling it sooner. If I were Sunak, I would be waiting till as late as possible to give myself more time to demonstrate a record of action. Expect opposition parties to keep pushing the rhetoric of time being up on the Conservatives in government and calling for an early election at every opportunity. Sunak will also need to keep a close eye on the right of his party, likely to be disgruntled by the recent sacking of Suella Braverman and new Ministerial appointees. He needs to hold the party together. WHAT’S HAPPENING WITH LABOUR? It is widely reported that Labour are now around 20 points ahead of the Tories in the election polls. It is looking ever more likely that they will form the next government, which can be a double-edged sword for current leader Keir Starmer. There is a view that all Starmer needs to do is make it to the next election and the job of Prime Minister will be his. He is riding high from a successful party conference, where attendance was up. In fact, the corporate events sold out well in advance, indicating where the business community are focusing their lobbying activity. This is a stark difference to the Tories that had to …

Combating economic crime
Giving fraud prevention the credit it deserves

Published 27 November 2023

The need to tackle fraud remains critical. As UK Finance reports that consumers have lost over half a billion pounds to fraud in the first half of 2023, it has never been more important to stop criminals in their tracks – at the earliest opportunity. While doorstepping residents remains a favoured tactic for opportunistic criminals, the face of modern fraud is online and digital – exploiting vulnerabilities through fake emails and websites, and bogus social media messages and SMS. This often makes it even more difficult to detect and report fraud. However, what we are saying is nothing new. We all know we want to combat fraud, but how do we do it? At Cifas, we have spent the last 35 years helping our 700-strong membership save billions of pounds. The time is ripe for the credit industry to work with other industries and the public to take data-sharing to the next level, and turn the tide on modern-day fraud and financial crime. Our not-for-profit organisation was initiated by the consumer credit industry, set-up as a vehicle to exchange fraud data in the analogue age. Over the years, we have developed and expanded our services to meet the changing needs of the credit industry and wider sectors, which each benefit from sharing their fraud risk data and collective expertise. Further evolving this platform for the digital era is a key priority for us, and the time is ripe for the credit industry to work with other industries and the public to take data-sharing to the next level, and turn the tide on modern-day fraud and financial crime. Why now? Because the opportunity is clear. The UK Government Economic Crime Data Strategy, announced in the Economic Crime Plan, presents a once-in-a-generation chance to create the infrastructure and framework to bring about a step-change in prevention and detection. Done right, this strategy could unlock the fraud prevention potential of a crime costing the UK upwards of £200 billion per annum. That figure alone underlines the significance of the challenge, and why a collective approach is needed to unlock the power of data and reduce economic crime. The conditions are right for this next step forward. Firstly, while the data landscape across the UK’s anti-economic crime community is fragmented, considerable strides have been made in data-networking and analytical capabilities, which offer a new-found ability to bridge this disparate landscape. Secondly, the current Data Protection and Digital Information Bill, if passed into law, provides further legal clarity around the sharing of data for the purposes of preventing or detecting crime. Thirdly, the UK government’s Economic Crime Plan 2, launched in March 2023, rightly recognises the value of data in the fight against economic crime and commits to creating a public-private National Economic Crime Data Strategy to “enhance the exploitation of available data across the ecosystem to better prevent, detect, and pursue economic crime”. If correctly framed, the Data Strategy has the potential to revolutionise the response to economic crime in the UK and provide …