StepChange responds to UK regulators’ joint letter on debt collection

^{18 March 2024}

Today members of the UK Regulators’ Network (UKRN) the FCA, Ofgem, Ofwat, and Ofcom, have published a joint letter setting out shared expectations in relation to debt collection and customers experiencing financial difficulty.

This comes on the first day of Debt Awareness Week (18th – 24th March), an annual campaign led by StepChange which aims to encourage those struggling with debt to access free debt advice.

Richard Lane, Chief Client Officer at StepChange Debt Charity, said:

“We’re pleased to see this letter acknowledge just how many people facing debt collection are in vulnerable circumstances and need support and empathy rather than punitive action. Since the cost of living crisis, we’ve seen the amount of utility arrears spike among our clients, with those on the lowest incomes struggling to cover steep rises in their essential costs.

“We know from previous research that the language used in collections communications can exacerbate problems for those facing financial difficulty, and lead to further harm rather than to greater debt recovery. For someone experiencing mental health issues or another vulnerability, threatening communications can cause them to disengage.

“This Debt Awareness Week, we’re focusing on some of the barriers that can stand in the way of people getting help with debt. It’s vital that firms do everything in their power to make it easier for customers to access support when they’re facing debt collection. This includes reviewing the tone of their communications and effectively signposting to free debt advice, in a way that is clear for the consumer.”