Working together to help people in debt
Money advisers and creditors working together to help people in
debtOn 16th of June, the Money Advice Trust (MAT), the British Bankers’
Association (BBA) and the Finance and Leasing Association (FLA) will re-launch an improved and
updated version of the Common Financial Statement (which standardises the way money advisers and
creditors communicate with each other about repayment offers). This will help more people in debt to
resolve their difficulties more quickly and easily. The MAT/BBA/FLA’s Common Financial
Statement was first introduced in 2002 and has helped money advisers make many thousands of
repayment proposals to creditors on behalf of their clients. Expenditure is measured by advisers
against agreed trigger figures for categories of discretionary spending (drawn from the Office for
National Statistics data for household expenditure) and comment made where the trigger figures are
exceeded. Following wide consultation with money advisers (e.g. The Institute of Money
Advisers), advice agency membership organisations (e.g. Citizens Advice, adviceuk), creditors
(e.g. banks and credit card companies) and government (e.g. Insolvency Service and Court Service),
some key improvements to the Common Financial Statement are being implemented to help simplify and
speed up the process.
Key
changes  There will be four trigger
headings going forward – telephone, travel, housekeeping and other. Expenditure lines for pets,
health, mobile and repairs/maintenance will be reallocated. Many of these had low total values and
were hard to justify as stand-alone
headings.
 A ‘child multiplier’ will be
introduced so that expenditure can be matched to actual child numbers in a household (rather than an
assumed average under the current system). Furthermore, children will be split into two age bands
(up to 14 years and over 14 years) with different expenditure
allocations.
The introduction of a specific
car expenditure allowance under the travel trigger figure, rather than the current unitary travel
figure that seeks to cover such expenditure whether or not a car is used. Going forward, therefore,
a more focussed assessment should be possible.
More detail of the changes can be found
on MAT’s website.
The launch of the new
Common Financial Statement has been welcomed by money advisers, creditors and people in debt as a
way of speeding up the acceptance of repayment offers for those experiencing financial difficulties.
It continues to be adopted by all of the BBA's retail bank members and the FLA’s members who have
agreed that they will accept without further question repayment proposals using the Common Financial
Statement where the expenditure is within agreed trigger figures. In making the improvements,
it is hoped that the Common Financial Statement principle will be adopted by more trade bodies and
their members.
The Money Advice Trust, which last year provided over 5,800 training
places for money advisers, has incorporated the statement into its training package and Citizens
Advice, one of MAT's partner agencies, will be incorporating the new Statement into its electronic
casework system which is accessible through its many advice outlets.
Eric Leenders,
executive director of retail of the BBA said:"Helping customers to run their finances
smoothly in a complicated world is core business for banks, and this applies in bad as well as good
times. When people get into financial difficulties they need banks to work with them and their money
advisers. This updated and revised version of the common financial statement will make a significant
difference in helping people resolve their financial difficulties and alleviate some of the stress
that inevitably occurs when negotiating repayment arrangements."
Stephen Sklaroff,
director general of the FLA said:“The FLA is delighted to support the revised Common Financial
Statement. Our members accept the CFS as a part of their commitment to our Lending Code. This
updated version will be a key tool in helping to ensure that lenders get all the data needed to be
able take a positive, sympathetic and informed view of their client's financial
situation."
Joanna Elson, chief executive of the Money Advice Trust added:"I
am convinced that the new updated Common Financial Statement will make a significant difference in
helping people resolve their financial difficulties providing an improved process for customers,
advisers and creditors."
For more information, contact
Jon Elwes on 020 7653 9722 or
email jon@moneyadvicetrust.org
Note to Editors
The Money Advice
Trust (MAT) is a charity formed in 1991 to increase the quality and availability of money advice in
the UK. MAT’s vision is to contribute to reducing unmanageable debt of UK consumers and its mission
is to support individuals in the UK with unmanageable debts and to improve the capacity, quality and
efficient delivery of free-to-client independent money advice, through:
Co-ordination
Influence
Direct service provision
Training
Research
Information provision.
The Rt. Hon Ian McCartney MP was appointed MAT’s President (unpaid) in
November 2007. Ian McCartney has been a campaigner against illegal money lending and has introduced
various government initiatives including the then Department of Trade and Industry’s (now Department
for Business, Enterprise and Regulatory Reform) loan shark projects.
MAT has the following trustees:-
Martin Hall MVO MBE
(Chairman)
Margaret Bloom CBE (Deputy Chair)
Garry Hunter
Eva Lomnicka
Brian Pomeroy
CBE
John Saunders
Ian Mullen
Jenny Watson
MAT’s
activities cover:
a) Support to the debt advice sector
through:-
i) Training
ii) Specialist support
iii) Quality assurance developments,
e.g. Money Advice Quality Model
iv) Policy, research and
evaluation
v) Fundraising, facilitation and strategy
development
b) Direct service provision (National Debtline and
Business Debtline)
National Debtline (NDL) (www.nationaldebtline.co.uk) is part of the Money Advice
Trust (MAT) (www.moneyadvicetrust.org), a charity
formed in 1991 to increase the quality and availability of free, independent money advice in the
UK. MAT also runs Business Debtline (BDL) (www.bdl.org.uk). BDL and NDL are under the same roof and
benefit from the sharing of experience, knowledge and technology.
c)
Facts about MAT and its services:
i) NDL first started in 1987
under the name Housing Debtline and consisted of only two advisers and one phone.
ii) During 2007 NDL dealt with a record number of enquiries and
helped approximately 115,000.
iii) MAT offers over 5000
fully-subsidised training places each year to money advisers who give free-to-the-client
advice
BBAThe BBA is the leading association for the UK banking and financial
services sector, speaking for 223 banking members from 60 countries on the full range of UK or
international banking issues and engaging with 37 associated professional
firms.
FLAFLA is the principal representative of the asset, consumer and motor
finance sectors in the UK. In 2007 FLA members did £93.0 billion of new business. £28 billion was
provided to the business sector and UK public services, representing almost 30% of all fixed capital
investment in the UK last year (excluding real property and own-account software). The remaining £65
billion was provided to the consumer sector, representing almost 30% of all unsecured lending in the
UK in 2007. FLA members provided £18.9 billion of motor finance in 2007 and financed more than
50% of all new car registrations in the UK.
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