Presentation Transcript

1. Energy ActionFuel Debt Workshop Fuel Poverty ConferenceDublin Castle7 February 2011

   Michael Culloty National Social Policy and Communications Officer MABS National Development Ltd.
2. Outline Agenda About MABS High level principles based on experience Utility debt
3. MABS – Free, Confidential and Independent Objectives: The provision of money advice to people in debt or in danger of getting into debt Empower them by providing knowledge and skills Promote change in policy and practice Focus on low income families
4. MABS Statistics Statistics: In excess of 25,000 new active cases in 2010 35% increase in clients approaching MABS in 2009 10% increase in clients in 2010 15% increase in Helpline calls in 2010 (125% increase on 2009) 70% of clients are social welfare recipients (previously averaged 65%)
5. MABS Stats contd.
6. Budget Priorities Mortgage or rent “Light and heat” Food Resources available for basic living requirements (education, transport for work purposes, childcare) Court fines etc. NB. If any one of the above is neglected the repayment plan will not be sustainable
7. Experience of MABS in Money Advice 18 years’ organisational experience of dealing with debtincluding utility debt There is a fundamental difference between people who can’t pay and those who won’t pay – must be treated differently Holistic, informal non adversarial approach works - both for the client and creditor The present process for dealing with arrears/consumer debt is inappropriate for many clients Disconnection/court proceedings worsen the situation of people who can’t pay
8. MABS Approach to Utility Debt A priority debt (see approach in SFS/Money Mgmt Guide etc.) Increase in problematic cases emerging in case work Our approach: Arrears: If part of a multiple debt problem will usually seen by Services SFS developed and offers made the main utility supplier, will be prioritised Offer will be a payment on the arrears + the scheduled payment If a single debt arrear – supported self-help via the website or MABS Helpline
9. MABS Approach to Utility Debt Our Approach:Disconnection Where disconnection is part of a multiple debt problem – again, will usually be seen by Services and will be prioritised (this causes increased pressure on MABS Services) If a single debt issue and threatened disconnection/ disconnected – again will usually be seen by Services but can in some cases be referred to the MABS Helpline (However, disconnection is often a signifier of a bigger problem - income adequacy, vulnerability, fear)
10. Vulnerable Consumer MABS recognises a vulnerable consumer to be someone who for reasons of age, health or disability, the disconnection of gas or electricity presents a clear threat to their or a member of their household’s health or wellbeing
11. Utility Suppliers/ MABS Protocol presently being negotiated Basic Principles: is designed to improve operational effectiveness of the energy suppliers/MABS engagement enables and commits the suppliers and MABS to work together effectively to help clients address debt problems in an effective and realistic manner accepts that each supplier adopts a different approach to debt recovery and each case of indebtedness is unique recognises the concepts of full disclosure and debt settlement commits energy suppliers and MABS to work together to formulate a mutually acceptable, affordable and sustainable repayment plan Note: Protocol focus is on process – but obviously the goal is to avoid disconnection
12. Interim report of the Law Reform Commission (May 2010) Extension of the IBF-MABS Operational Protocol on Managing Debt: this will also bring more financial institutions and other creditors into a nationally agreed debt management process, so that it includes not just IBF members (as at present) but also credit unions and, potentially, the so-called “sub-prime lenders” as well as utility companies. The successful outcome of this extension would also make a significant change on the ground for people in difficulties. (Action point 2 of 14).
13. Energy Suppliers/MABS Operational Protocol Government’s Expert Group Interim Report The Group also recognises, in regard to personal debt, the existence and valuable contribution of the Irish Banking Federation - Money Advice and Budgeting Service Operational Protocol (IBF/MABS Protocol) on dealing with debt arrears, the ongoing review of this Protocol and the work being done to extend it to other branches of the credit industry. p 36 The Group recommends that pending the comprehensive reform of the personal insolvency system in Ireland, that the following measures to address the problems of personal indebtedness be adopted and facilitated: The extension of the IBF/MABS Protocol to a wider group of creditors as an important step towards ensuring that an individual’s debt difficulties can be addressed in a standardised, mutually-satisfactory and holistic manner.
14. Questions What is the process that leads to disconnection? Why is customer contact failing? What to do when sources of help have run out post disconnection, e.g. previously received an ENP and accessed charitable support? Is there enough effort made to determine those who can’t pay vs. those who won’t pay - determining the ability to pay Is there enough effort made to assess vulnerability?
15. MABS Thank you Your Questions