Given the horror stories we have all heard, we fully share concern about the issue that this proposed Bill seeks to address and support the intent behind it.
However, Senedd Lawyers have advised that:
“A Bill to regulate debt enforcement agents would be outside the legislative competence of the Senedd.
“This is on the basis that the ‘enforcement of orders of the courts’ is a reserved matter.
Senedd Lawyers additionally advise that “a Bill to regulate debt collection agents would also likely fall outside the competence of the Senedd.
“This is on the basis that aspects of debt collecting is regulated by the Financial Conduct Authority, and therefore would likely relate to the reserved matter of ‘financial services’.”
They also noted that a general restriction on modifying the private law of contract in certain circumstances may be engaged to some extent.
Beyond that, the devil is in the detail, and it is difficult to assess when we only have generic ideas or topics for a debate, although Points 2A and 2C in the motion seem fine.
In terms of 2A, however, which seeks to “place a duty on public service providers to only use debt collectors who sign up to a code of conduct that protects vulnerable people in a cost-of-living crisis”, I venture that we need to protect vulnerable people at all times.
In terms of the “code of conduct”, Senedd lawyers added that in order for this to be within competence it would have to be a “voluntary” code and could not be enforceable as this would amount to “Regulation”.
I would therefore be grateful if the Member could explain how he would ensure such a code of conduct was within Senedd competence – and, if it is intended only to be voluntary, how effective, or workable that would be?
I refer for example, to the Mortgage Code introduced in the 1990s, which enabled the very people who ultimately caused the 2008 banking crash to register.
It should also be noted that it is already a legal requirement for a debt collection agency to register as a debt collection agency that it is legally able to act and recover debt on behalf of a creditor.
Further, once they have registered, they must follow the guidelines set out by the Financial Conduct Authority, the Financial Ombudsman Service, and the Competitions and Markets Authority, each of which may also supervise these businesses.
Recovery Actions that could be deemed harassment or abusive and are not permitted already include “entering a debtor’s home without consent” and “pressuring a debtor to make payments they cannot afford”.
The real issue is therefore one of enforcement, not largely on unenforceable legislation.
