How to do the right thing
Examples of good practice that help consumers address and overcome periods of financial difficulty
A large amount of positive work has been undertaken in recent years to help consumers in financial difficulty and ensure free high quality independent advice is available to those who need it:
- Regulators, trade associations and firms have developed sector specific rules, guidelines and practices that have driven up standards.
- Advisers and creditors have collaborated to improve the way they help people in debt, such as CASHflow and the common financial statement (CFS).
- Government and industry continue to fund debt advice services that are free to the consumer.
Organisations in the free advice sector wanted to build on this work. In 2010 they published Do the right thing, which set out how they believe creditors can achieve good practice in debt collection.1
Following the launch of this report, local and national government agencies, creditors, debt collectors, bailiffs and advisers came together to form the 'Addressing Financial Difficulties' good practice working party (AFD).
AFD members agree that despite all the positive work that has been undertaken to help struggling consumers some problems still exist:
- The needs of vulnerable consumers are not always met.
- Consumers don't always act early when they are facing financial difficulty.
- Some consumers still ignore their financial difficulties, often 'burying their heads in the sand' in the hope it will all go away.
- Some of those consumers that do engage later give up and stop paying altogether.
- Some advisers and creditors still do not work together in a constructive and positive manner.
But these problems don't always happen. Why is this? And, when they do, how can we overcome them?
This publication seeks to answer these questions and promote constructive engagement between creditors, advisers and consumers, leading to better and more consistent outcomes for all.
It brings examples of good practice from different sectors together to set out a five part approach toaddressing financial difficulties:
- Part one: Preparation
- Part two: Identification
- Part three: Encouragement
- Part four: Cooperation
- Part five: Engagement
1.Do the right thing, Citizens Advice, 2010.