Councils have defended their use of bailiffs after a charity said “heavy handed” debt collection practices were leaving families – and more specifically children – in fear.
The Children’s Society said North-East local authorities had engaged bailiffs an estimated 51,800 times last year to recover council tax debts.
Meanwhile, Durham County Council said it had referred 22,306 council tax warrants to bailiffs, although this was over the last three years rather than a 12 month period.
Bailiffs, typically employed by private companies, have the power to enforce non-payment of debts by seizing property from homeowners.
The Children’s Society said in just 14 days families could go from missing a council tax payment to facing court proceedings and action from bailiffs.
It described incidents in which children had answered the phone to a debt collector or been present when they had called in person, leaving them frightened and unable to sleep as a result.
One mother, who was among 4,500 parents surveyed for the charity’s research, said: “My children knew mummy was stressed and there were strange people at the door wanting things.
“Most of the furniture got taken at that point.”
It said three quarters of parents in this position had not been given help to find independent advice and local authorities were “rushing to penalise struggling families by demanding sudden, unrealistic” payments.
Matthew Reed, the charity’s chief executive, said:
“Far too many families are failed by their council when they fall behind with their council tax.”
Ian Fergusson, Durham County Council’s revenue and benefits manager, said:
“The use of bailiffs is always a last resort and the bailiffs that we use are highly trained to be respectful of council tax payers and their families at all times.
“We would encourage anyone who is experiencing financial difficulties to contact us to discuss the issues they are facing.”
“In every case the council will always try to come to an arrangement first.
“Our enforcement agents have a strict code of conduct that does not allow any of their staff to discuss a debt with a child.”
Source – Northern Echo, 26 Mar 2015
Calls have been made for a criminal investigation of Wonga after claims of misleading debt collection practices.
Newcastle United sponsor Wonga was ordered pay more than £2.6 million in compensation to around 45,000 customers for “unfair and misleading debt collection practices”, the City regulator announced this week.
Now the Law Society has asked the Metropolitan Police to investigate Wonga in the wake of the controversy.
The Society has also called on the Financial Conduct Authority to hand over copies of its investigation and the Solicitors Regulation Authority to examine whether an offence has been committed under the Legal Services Act 2007.
Law Society chief executive Desmond Hudson said: “It seems that the intention behind Wonga’s dishonest activity was to make customers believe that their outstanding debt had been passed to a genuine law firm.
“It looks like they also wanted customers to believe that court action undertaken by a genuine law firm would follow if the debt was not repaid.
“Depending on the precise circumstances of what has happened, that could amount to blackmail and deception, as well as offences under the Solicitors Act 1974 and Legal Services Act 2007.”
Wonga, which struck a controversial four-year sponsorship deal with Newcastle United in October 2012, apologised “unreservedly” for the failings, which took place between October 2008 and November 2010.
Tim Weller, interim Wonga CEO, said: “We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result.
“The practice was unacceptable and we voluntarily ceased it nearly four years ago.”
Source – Newcastle Evening Chronicle, 27 June 2014
> Another erosion of your rights…
The government has recently granted HMRC new powers to help itself to whatever is in your bank account.
Chancellor George Osborne recently announced as part of his 2014 Budget that the tax authority will be able to bypass any scrutiny or due process and take money directly from your account if they feel that it is necessary.
Previously, they had to have a court order and prove that you owed them money, or they would first have to take out insolvency or debt collection proceedings against you. Now, the burden of proof lies solely with the individual concerned, who will be forced to claw back the money from HMRC if they feel that the judgement was made in error.
Of course, the only realistic way for an individual to defend themselves in such circumstances would be to take HMRC to court, but by then they will have already helped themselves to the money in your account, leaving you with no money to pay a lawyer.
The law is frightfully similar to the powers afforded to the much-maligned IRS in America which has the same powers and has come under fire in many well-documented cases where families have been forced into homelessness after having their bank accounts raided by the IRS.
The IRS also has the power to freeze any assets or money attached to an individual or businesses name – meaning that even if you did have money left over to challenge them – you would not be allowed to access it. HMRC have the same powers.
But it has defended these new powers which it has awarded itself by saying that they can only be used once you’ve received a couple of letters and a phone call.
They also claim that this will only apply to people with more than £1,000 worth of debt and they are required to leave at least £5,000 in your account.
Once the money has been grabbed from your account, it is then put on hold for 14 days and you will then have to agree to a payment plan.
But its powers do not end there. It is also able to snatch money from you if it thinks that it may win a legal battle against you.
In other words, if you are in a dispute with them about how much money you owe, they can take the legal expenses out of your account on the proviso that they give it all back to you if you win.
In other words, you can now face sanctions before a case has been proven against you. Not only does this break every single legal foundation that our current laws are based upon, it also sets a very dangerous precedent indeed, and represents a significant power grab from a government department that has just made itself less accountable.
(The bank account confiscation power is in Section 1.208 and the future confiscation power is in Section 1.200 and 1.201. You can access the full Budget document here.)
Source – Akashic Times, 29 March 2014