ARTICLE...
New Rules Will Put More in Debt
Proposed data sharing rules could also increase 'mis-traces'.
The government's latest review of data sharing and, specifically the use of the electoral role, will ironically plunge more people into debt, as well as dramatically increase incidences of 'mis-traces' - where consumers are wrongly identified as owing money that they don't.
The warning comes from the Credit Services Association (CSA), the body representing the UK debt collection industry, which has just revealed figures showing that the number of debts that now require a 'trace' - i.e. where the debtor has moved houses without informing their creditors - has increased to more than £8 million, a 10-fold increase from the 860,000 cases reported in 2006/7.
The data sharing review, by the Information Commissioner Richard Thomas and Dr Mark Walport, was initially given a cautious welcome by the CSA.
- At a Glance: Potential Problems
- Electoral roll allowed to be used to grant credit but not chase debt
- 'Trace' investigations increase 10-fold to more than eight million
- CSA calls for establishment of National Address Register
Spokesman Dr Roger Lucas explained: "We were happy to welcome the review since it has become obvious that even if the legislation surrounding the sharing of data is not all it should be, then the data-sharing culture of some large, including Governmental, organisations certainly isn't.
"What has happened, however, is that with this new report, the Government is once again in danger of making progress on one issue at the expense of another, with that 'other' being its expressed commitment to reduce over-indebtedness."
The Data Sharing Review, in recommending the abolition of the edited electoral roll, does however present the Government with an opportunity to make good an anomaly and make progress with its fight against over-indebtedness.
"It has always been considered an anomaly by the debt collection industry that the use of the full electoral roll for collecting debts was not a 'permitted use' under the original legislation - The Representation of the People Act (2000)," Dr Lucas continued, "It was, and is, anomalous that the full register is available for the granting of credit, (this is obviously essential), but not for the process of recovering sums borrowed.
"It is thus the case that this legislation has always helped people into debt but not out of it!
"It is quite wrong to continue to bracket debt collection with direct marketing and it will have serious consequences if the above recommendation of the Data Sharing Review was to be implemented without recognising this and rectifying the above anomaly," added Dr Lucas.
The member companies of the CSA, the trade association of the debt collection industry, instructed over 8 million 'traces' last year. These are instructions to locate people who have either moved without informing their creditors or who simply return creditors' correspondence as 'gone away'.
Dr Lucas explained: "This is almost epidemic and inevitably leads to some mistakes and the wrong people being chased for debts they do not owe.
"At least with access to the edited electoral roll (that actually only comprises 60% of the full roll) it gave collectors one route to checking whether someone who claims NOT to owe a debt is actually telling the truth with regard to their residential status and history. This situation will be seriously exacerbated if the edited electoral roll is simply abolished and not replaced."
Dr Lucas concluded: "The Government needs to take a serious look at the issue of a National Address Register.
"The UK is the only EU country apart from Greece without any form of such, and/or place greater obligations on those who avail themselves of credit with the vast protection of the Consumer Credit Act, but then abuse that protection."
Original article courtesy of CSA. For further information visit www.csa-uk.com.
