How the compliance stage ascertains 'what's behind the door'

How the compliance stage ascertains 'what's behind the door'.

As the primary trade association for civil enforcement agencies, representing more than 95% of the industry, CIVEA works to educate about that the enforcement process. This includes correcting myths and misunderstanding. For example, there have been recent claims that enforcement agents, who observe social distancing and are not entering properties under COVID-19 restrictions, are attempting to value debtors’ belongings by peering through windows. This is typical of the scaremongering that is associated with enforcement activity, for which there is no basis in fact. Before any enforcement visit is made there are extensive efforts made to understand an individual’s circumstances and learn what is behind is the door before it is opened to an enforcement agent.

Enforcement agents are often confused with debt collectors that work for private companies, but this is not an accurate comparison. Enforcement is the final stage of an extensive process of debt collection, in which the court has issued a warrant or order instructing an enforcement agent to take control of goods in lieu of payment. CIVEA member firms cannot authorise an enforcement visit without prior notification as part of the Compliance Stage.

What is the compliance stage?

The Compliance Stage begins when the court instructs an enforcement agency to recover unpaid debt. It is designed to provide an opportunity for someone in debt to make contact to arrange payment before incurring higher costs at a later stage. In over 50 percent of cases, debts are recovered at the compliance stage, often in instalments through affordable repayment plans.

Much of the Compliance Stage work of enforcement firms takes place behind the scenes and it can appear that the fixed charge of £75 is for simply sending out a Notice of Enforcement. The Compliance Stage involves extensive work to trace people, verify details and make contact to arrange payment. It can involve credit referencing, DVLA licensing checks, emails, texts, calls and letters. Conversations that take place at this stage are usually the first indications of ‘what’s behind the door’ help enforcement firms to respond appropriate when recovering debt for courts and local authorities.

The Notice of Enforcement sent at the Compliance Stage gives details of the outstanding debt. It explains how and when to pay and what happens if payment is not made, including the extra charges that could be applied. The notice also gives contact details for the enforcement agency and options free debt advice. Anyone receiving a Notice of Enforcement has at least seven days (not including Sundays or Bank Holidays) before any further action is taken unless a court has decided otherwise. If a recipient is unable to pay they are advised to make contact with to discuss their circumstances.

The use of technology has become essential to this process and many enforcement firms utilise sophisticated data analytics to assess propensity to pay. Technology is used to improve engagement with people and make debt management easier, for example, the development of apps to allow people to make contactless payments.

Phone calls, text messages, social media channels, emails and letters are just some of the ways that enforcement firms attempt to make contact. In the case of overdue council tax payments, CIVEA figures show that around 40% of debt is collected at the Compliance Stage that negates the need for a doorstep visit.

There have been suggestions that more of this upfront work could be undertaken by local authority teams. Increasingly there have been requests from council clients for enforcement firms to take on pre-visit engagement work because local authorities lack the resource. It is more efficient and less costly for taxpayers for time-consuming yet essential Compliance Stage communications to be handled by expert enforcement firms. CIVEA was pleased to hear support on this matter from the Chartered Institute of Public Finance and Accountancy (CIPFA), who recently outlined the importance of revenue collection post-pandemic, and agreed with the need to retain enforcement as an option for local authorities.

Why are visits necessary?

Even though around half of the debt recovered by enforcement agents is collected through Compliance Stage activity and repayment plans, there will always be a need for enforcement visits as some people will deliberately avoid all attempts by local councils to recover much-needed funds. We understand that the prospect of a visit from an enforcement agent can be daunting, but this is a necessary action for wilful non-payers and is a deterrent for those who refuse to pay when they are able. Around 60% of revenue collected by local authorities funds support for vulnerable people, such as adult and children’s services.

The later enforcement stages, including visits, are expensive for enforcement firms as well as adding to the total debt. Enforcement firms must employ agents to visits, hire vehicles and equipment, They must operate sophisticated tracking software and body-worn video cameras with back-office monitoring. To ensure fair treatment of people in debt, the enforcement process is specifically designed to encourage early engagement and to help people affordably settle their debts quickly without additional charges. It remains in the interest of enforcement firms to resolve cases before visits are undertaken, which is why it is a last resort.

Firm but fair

When a visit is necessary, every enforcement agent follows government regulations and guidelines. Under the current conditions, every enforcement agent is trained in coronavirus health and safety measures, such as conducting contactless visits, social distancing and the correct use of PPE. All agents have received refresher training on working safely and identifying vulnerability. CIVEA members have dedicated welfare teams to deal with the most vulnerable cases and field agents are trained extensively to identify and refer vulnerable people to additional support services.

Enforcement is complex, highly specialised, and essential work that is needed to recover lost revenue for local and central government.

CIVEA and its members understand the challenges for those in financial hardship and will always support customers who are vulnerable or are struggling to pay their debts. Our shared industry ambition always has been recuperating funds from those who can afford to pay but are making the choice not to. The process is designed to be firm for those in debt and fair for charge payers that fund local services.

For more information on enforcement processes, please view our video ‘CIVEA Guide To Enforcement’ or visit our FAQ section.