An independent review released this week has claimed that bailiff companies – increasingly used by local authorities for debt collection of council taxes, parking fines and congestion charges – are acting unlawfully, casting doubt on the legality of debt collections since the enforcement act of April 2014.

The review states that the Tribunals, Courts and Enforcement (TCE) Act makes ‘no reference to limited companies acting as an enforcement agent’, only to individuals, leaving bailiff companies unrecognised as entities in enforcement law, and also unregulated.

Yesterday marked three years since the implementation of the TCE Act, brought in to clarify and professionalise the bailiff industry following concerns of unlawful and aggressive action. However, a further review by 7 charities including StepChange last month said ‘these reforms have had only minimal impact’ and those contacting debt advice charities ‘continue to report widespread problems with the behaviour of bailiffs and bailiff firms’.

“Local Authorities in England and Wales refer 1.8 million debts to bailiffs in 12 months” (2014, Money Advice Trust) 

The introduction of the Act coincided with Conservative welfare reforms demanding higher payments of council tax from those on lower incomes, some of whom were previously ineligible yet were simultaneously be hit with several other changes to welfare and income (e.g. bedroom tax). Last year StepChange, a debt charity, found that Council Tax arrears had increased 25% on average from £717 in 2011 to £961 in 2015. Further, 14% of the charity’s clients were struggling to pay in 2011, in 2015 this reached 30%.

Local Authorities have increased their tendering of contracts to bailiff companies to carry out their debt collection work. Complaints have arisen regarding the work of these firms and the techniques used to escalate charges and action against debtors. Last year Citizens Advice interviewed 1000 clients with Council Tax Arrears and found 71% had extra charges added to their bill and 48% had been visited by a bailiff, with only 30% offered an affordable repayment plan.

The charity review noted ‘there should be a clear and common fee structure’ which encourages early resolution and statutory requirements before progressing to the next stage. They also called for an independent regulator and a ‘firm, statutory definition’ of vulnerability – debtors who should be protected against bailiff action.

The second review, released this week and authored by several bailiff industry experts, echoed these sentiments but went further to detail recommendations for increased standards within the bailiff industry, opening with the need for clarity on the position of bailiff companies.

The government initially promised a review one year after the enforcement legislation was implemented, but this was later shelved. Three years later both experts and charities are demanding that a review be carried out on the legislation, by the Ministry of Justice.

More to follow on Real Media