Financial Guidance and Claims Bill [HL]

Written evidence submitted by John Lamidey MBE (FGCB02)

I am an independent consultant with 22 years practical experience of non-standard consumer credit and consumer debt issues in a range of roles. Below are two observations I would like to lay before the Commons Public Bill Committee which is going to consider the Financial Guidance and Claims Bill.

Part 1

The new Single Financial Guidance Body (SFGB) should be the authority to set up and run the proposals for a statutory breathing space for those with serious problem debt, and statutory repayments plans, under HM Treasury proposals published on 24th October 2017. The SFGB should be given statutory powers to determine all aspects of statutory breathing space and statutory repayment plans, in particular the definition of serious problem debt. This should be defined clearly and be beyond financial difficulty where commercial lenders already have to show forbearance and schemes such as those operated by HMRC and DWP.

The SFGB should be the authority responsible for regulating and enforcing access to a breathing space, statutory repayment plans and the resolution of disputes. Eligibility for the statutory breathing space and statutory repayment plans should be determined by a set of defined characteristics, to give absolute clarity to advisers, debtors and creditors. If there is to be any room for discretion, this should be authorised in particular cases by the SFGB. A breathing space and statutory repayment plan should only be available for a person in serious problem debt (to be defined by the SFGB) who seeks debt advice from an FCA authorised firm.

No debts, including informal borrowing, should be exempt from the process. All debts, including tax and utility debts, fines and penalties, and potentially even student loan debt should be treated equally and included in the process. From the debtor’s perspective it is confusing and stressful for various debts to be categorised in different manners. Simply to assess the total debt owed and manage it on an equitable basis for creditors would simplify current arrangements enormously.

Debt held by the self-employed and partnerships of up to three individuals, but not companies, should be included.

Part 2

All claims management activity should be FCA regulated. There should not be a loophole for solicitors who undertake claims management activities only to be regulated by the SRA and thus avoid FCA supervision.

January 2018

 

Prepared 1st February 2018