New Standards on Vulnerability and Ability to Pay
I hope that you’ll already be aware of the ECB’s consultation on draft Standards for Vulnerability and Ability to Pay, which we launched on 19 September. This is a milestone moment for us and I want to use this newsletter to set the scene, provide more detail on the process so far, and to thank everyone who has contributed to the conversation already.
When we published our first set of Standards last year, we made the decision to spend a little more time thinking about vulnerability and ability to pay, and to publish Standards on these issues at a later date. This was in recognition of the fact that these are difficult, knotty issues that needed more time, input and thought.
We have been developing the draft Standards since April and they have benefitted from excellent engagement from a range of stakeholders, including enforcement firms and agents, debt advisers, and people who have experienced enforcement action. I’ve been encouraged by the constructive and forward-looking engagement we’ve seen so far across the board. While we know there are still areas of concern and uncertainty, the willingness to engage positively is really heartening and gives us a good platform.
A “Vulnerability First” Mindset
At the heart of this work is a shift in how we talk about and respond to vulnerability. We believe that firms and agents should take a “vulnerability first” approach, recognising and responding to vulnerability throughout all stages of the enforcement process.
Because enforcement agents and firms encounter and manage vulnerability every day. It is not something that gets in the way of enforcement – it is a fundamental part of delivering enforcement.
I have been struck since my early days at the ECB at how often conversations about tackling vulnerability are actually focused only on acute or extreme cases of vulnerability, of the sort that will likely involve specialist welfare teams and which could lead to enforcement action being paused. These cases are very important. But in addition, many cases will involve less acute vulnerabilities – situations where an acknowledgement, a small adjustment to communication, or a change in process can make enforcement safer and fairer.
This is where our concept of “safe by design”enforcement comes in. It’s about explicitly making vulnerability awareness the default, not the exception. It’s building a system where identifying and responding to vulnerability is part of the standard approach, not something reserved for specialists. And it’s about focusing on vulnerability from the perspective of how it might affect someone’s ability to engage with the enforcement process and what can be done to respond to this.
From our engagement so far I’m confident that there isn’t anything in the draft standards that isn’t already being done at some firms, at least some of the time. This is a positive starting point. The new Standards are about ensuring that all firms and agents are able to consistently demonstrate that they are identifying and responding to vulnerability appropriately.
Ability to Pay: Promoting Consistency and Sustainability
In essence, our draft Ability to Pay Standards aim to increase the use of sustainable, realistic payment arrangements, in cases where people cannot repay their debts in full immediately.
Our draft Standards recognise the importance of debts that are subject to enforcement being paid as swiftly as possible. They also recognise that for an enforcement agent to be involved, a court has already determined that assets can be taken to achieve this.
But the reality is that not everyone can pay in full immediately – with money or assets. And too often we hear about unrealistic payment plans being set up that either break (and everyone loses out) or prevent people meeting their basic living costs. Our proposed standards aim to:
- Prevent overly persistent pursuit of full payment when it’s clear someone can’t pay.
- Promote sustainable payment plans.
- Encourage greater use of payment plans at the compliance stage, where appropriate.
These goals have been broadly supported in our engagement so far. The challenge has always been how to translate them into workable standards, and we believe our draft Standards do just that. But we want to hear what people think through the consultation process.
The role of ‘judgement’
One theme that came through strongly in our workshops was the importance of judgement. Our standards are not a rigid rulebook. We’re not prescribing exactly how every situation should be handled. Instead, we’re asking firms to take ownership, developing their own strategies and frameworks, and empowering staff to make informed, defensible decisions. We will expect firms to be able to demonstrate that they have developed those strategies when we carry out our oversight and complaints activities.
Realistic implementation
What we are proposing amounts to a significant shift, and implementing these standards will take time, resources, and careful planning. That’s why we’re proposing a nine-month implementation period, with enforcement firms submitting plans to the ECB within the first three months to explain what they will do to ensure full compliance by the end of the implementation period.
We think this timeframe balances the imperative to get Standards in force quickly and start seeing the benefits, with recognition of the importance of firms’ taking some time to reflect and properly embrace and implement the changes required.
The consultation
As always, we genuinely want to hear your views. We want to know: do they work in practice? Have we missed anything? Are there unintended consequences? The consultation will be open for six weeks and we will review all responses received by Friday 31st October. Please submit your responses to contact@enforcementconductboard.org
Board members
On a different note, I’m pleased to say that we have appointed two excellent new Board members: Caroline Wells and Delroy Corinaldi. The appointments come as one of our existing Board members, Jenny Watson CBE, prepares to step down.
I’m looking forward to welcoming Caroline and Delroy to the Board. Between them they bring knowledge and experience of the enforcement industry, complaints, debt advice and the private and the public sector. They will bring new and fresh perspectives to our work at an important time, as we look to the year ahead and work to establish the ECB on a statutory footing. Press Release.
Chris Nichols
Chief Executive, ECB