Lowell is one of Europe’s largest credit management companies with a mission to make credit work better for all. Lowell has past or existing relationships with one in five UK adults and over 9.5m UK customers.
We have pioneered the approach to responsible collections in the private sector with fair and ethical practices at its heart, such as long-term affordable repayment plans, breathing spaces, extensive forbearance procedures and an award-winning vulnerable customer strategy.
We are also committed to putting customers at the heart of everything we do, to help them take back control of their debt. We’re passionate about changing the financial health of our customers forever and want to improve public and private sector debt practices as well as the perceptions of our sector.
As such, Lowell is keen to share insights from its customers as to the experiences they have had of Council tax Debt Collection as well as highlighting recent research that provides further insight into best practice and alternative models of collection that could improve customer outcomes.
Lowell has a deep understanding of the impact debt has on our customers. Being in debt, in particular problem debt, can have a profound mental and physical impact on someone’s health and wellbeing.
Over the last 2 years Lowell has been measuring and tracking our customers experiences through our programmes of research. Our Rant & Rave continuous tracking survey has collected the experiences of 140k customers. We have also conducted several in depth qualitative research studies to get a greater understanding the impact of being in debt has on our customers.
Our Engaged/Disengaged Customer research study in 2020 found that no one feels indifferent to their debt; all felt affected by it. Debt had negatively impacted their lives including mental health.
Through the course of our research over the last year Council Tax debt collection approaches/methods was spontaneously mentioned by many of our customers as being particularly heavy handed, with little consideration of the customers mental, physical or financial situation. Customers have told us that they had little or no notice before enforcement action was taken.
This earlier insight prompted us to undertake a bespoke piece of research in December 2021 with our Lowell Customer Panel, which is a virtual panel of over 2600 Lowell customers (and growing) and is used to help us better interact with a wider range of customers, using varied methodologies, to give us a more in-depth understanding of their needs, providing us with evidence to represent the experiences of our customers in the HCLG inquiry.
We asked our Customer Panel members to describe their experiences when dealing with Council Tax debt collection. The survey was sent out to 2310 Panel members. 276 Panel members responded. Of the 276 who responded 37% (103) had experienced Council Tax debt collection.
Our survey found that the vast majority of customers who had experienced Council Tax debt had an extremely poor experience.
Those customers with bad experiences talked about poor processes where letters were sent to an old address, so they were unaware of the debt before a Bailiff turned up at their door. Many customers talked about lack of consideration of their financial situation including low income, loss of job through the pandemic, or being in receipt of benefits. Another key issue was the lack of time to pay or the lack of ability to set up a payment plan to pay off the arrears.
Please note all quotes below and in ensuing sections are anonymised and taken from our Customer Panel Survey. We would be happy to provide further results or insights from the survey if of interest.
“They don't give you a chance to make payments, they sent out red letters every day for 2 weeks straight they threaten court action, all when I was in hospital, in intensive care really poorly, once I got someone to ring them they didn't care and wouldn't deal with them even though they were my next of kin, it still hasn't been sorted yet!! They have no heart or compassion were as other companies understood better and helped me more to get out of debt with them.”
“They had incorrect information on the debt the periods and the amounts owed. They did not listen took hard line with me like I was a general liar. And made threats. They just really failed to listen. And did not have manners call me back. I felt stressed upset undervalued as I had paid 16 years without hick up and this was a benefits mess up. Once I mentioned the MOJ (Ministry of Justice) they took note”
“Thought they were very rude just wanted payment would not listen for the reason why I couldn't pay the amount owed”
The two issues most mentioned by our customers were the speed of enforcement action and the attitude and behaviour of the Bailiffs used by the Council to collect the debt. Customers used the following words to describe the agents collecting the debt: arrogant, obnoxious, aggressive, forceful, threatening, Bully Boy, nasty, domineering, demanding, inconsiderate and lack of empathy.
“I accidentally missed two payments on my council tax with Scarborough Borough council a couple of years ago due to their incompetence of not sending me any letters in large print even though they're aware I am blind, they instructed Jacobs to collect, these are the scariest most aggressive people on the planet, they literally terrorised me, demanding more money than I earned, making threats, they came into my house because the door was unlocked as I was waiting for a GP visit that day, I was so scared of them, I put them as priority above everything else including utilities and food. I haven't missed a council tax payment or payment to them since. I know others who have had similar terrifying experience with them”
“I felt they were more forceful and didn’t really give much time to get things together for payment. Made me feel uncomfortable and scared”
“The debt collectors sent by councils were extremely forceful, inconsiderate, and at times quite intimidating. When I struggled with council tax debt many years ago, and the council sent these people after me, I felt genuinely threatened. It would not be hyperbole to say that I lived in fear. Neither they nor the council wanted to listen to my circumstances and try to figure something out. I had to simply do as I was told. 'Or else'”
“Most of the times the collectors have a terrible attitude and are bully's who are intimidating and not very polite. Out of all the debt collections I've had council tax has always been the absolute worst by 4 or 5 times any other company/collection agency. I did have one collector who was very nice. Did the same job as the others but didn't seem to enjoy it. Even the call centre staff were rude basically. I understand they will get people promising to pay and been unreliable, but each case should be judges on its own merits”
“It was a terrible experience I agreed stupidly to let them into the kitchen to talk and next thing I knew they basically forced their way around my property listing the very few items of value I had. This was obviously followed by the news they would be taking these items if I wasn’t able to pay what was owed on the spot. Once I showed them my bank statements and they accepted my financial position as being as I had described I was then given time to pay. All in all I was left traumatised by the whole experience”
“Absolutely horrendous. One Bailiff entered my house and walked into my bedroom when I was still in bed-a day after I'd been discharged from the high dependency cardiac unit following a suspected heart attack”
“Unpleasant experience, they use aggressive persuasion, not see you as struggling person. Nothing is negotiable”
Many customers mentioned how the approach made them feel: intimidated, very frightened, terrified, traumatised, scared, uncomfortable and suicidal.
“I felt they wasn’t considerate in my financial circumstances (I had been in hospital with a new-born in intensive care and fallen behind on payments) they made me feel suicidal and ruined my bonding with my new baby due to feeling so stressed with how they was treating me”
“Absolutely atrocious experience. I was in an abusive relationship where he had control over the finances. I was able to finally kick him out but by then it was too late. The council/debt people didn't take any of this into consideration. I was continuously harassed and threatened by male officers, despite them knowing my situation. I was petrified and traumatised and they made matters worse. In the end I had to move and I stayed off record just because I was so scared of them finding me. I lived in constant fear of them and my ex and hid in the dark, broke the doorbells for all my neighbours just so they couldn’t contact me. At one stage they threatened to remove my neighbour’s car. It was totally unacceptable behaviour to threaten a single woman several times a day via phone and letters. I believe one even pocketed the money I managed to get as a small payment as he gave me bank details over the phone when I was in the bank”
“Not very good, I was even driven to a home of a family member to get money, felt like I was a criminal and hadn't even time to sort out money. Should have been given chance to put payment plan in place”
Based on our customers’ feedback, it is clear there are some very poor practices used by Council Tax debt collectors. Councils are failing in their duty as the Ministerial forward states, “Council Tax collection and enforcement should never come at the cost of fair treatment of residents”.
There were however some examples of good experience where Councils understood the customers’ situation and payment plans to pay off the arrears was agreed. This accounted for 10% of the responses.
“They were helpful and sorted it out with me there and then and was glad I phoned”
“Very fair very well handled by them put us a repayment plan even when I missed a payment, they were understanding about our situation never once threatened us”
“Quite good and did everything by email and letters. Gave lots of options to repay”
Lowell are regulated by the Financial Conduct Authority that has a key principle of ‘Treating Customers Fairly’. Our customers experience clearly demonstrate that, under the current Council Tax debt collection process, unfair treatment and very poor treatment of people is present. We strongly believe Council Tax debt collection should be held to the same standards as the private sector to ensure fair treatment and good collection processes.
The current behaviour of bailiffs in unregulated areas remains of concern as we look at how to improve customer outcomes. Lowell is supporting ongoing dialogue between the debt advice and enforcement sector to create an independent oversight body for enforcement. The ongoing project is led by the Centre for Social Justice and proposed in a recent report called Taking Control for Good[1].
Lowell would also like to highlight to the committee the report by the Centre for Social Justice Collecting Dust[2] which analyses public sector debt collection practices, highlights good practice and proposes a Government Debt Management Bill to raise standards of public sector debt collection.
Though clearly problem debt and debt collection is a large and complicated picture, we believe if council tax debt collection was improved to the same standards as the private sector, we could reduce the stigma around debt; reduce barriers to beneficial engagement with the debt collection and debt advice sectors; and, improve outcomes for people in debt.
January 2022
[1] Taking Control for Good, Centre for Social Justice (2021) CSJJ9052-Taking-Control-For-Good-INT-210720-WEB.pdf (centreforsocialjustice.org.uk)
[2] Collecting Dust, Centre for Social Justice (2020) CSJJ8154-Debt-Report-INTS-200424.pdf (centreforsocialjustice.org.uk)