Criteria Debt Recovery
As a minimum, the criteria need only apply to FairLife Debt. That is debt that arrives marked with a FairLife logo or the words FairLife Debt. This has the added advantage that the original creditor has also agreed to the key criteria of the debt recovery mark.
1. The first criterion is to highlight free debt advice.
Customers must be informed that they can get free help from a FairLife Debt Advice group or a group on the FairLife Charity’s debt advice register.
2. The second criterion is the treatment of non-FCA-regulated debt.
Customers holding non-FCA-regulated FairLife Debt should be treated in a similar manner to those holding FCA regulated debt and should, as far as possible, be afforded the same benefits and protections.
Those following the spirit of criteria 1 will add nothing, or very little, by way of costs and interest to customers’ debt (with the accepted exception of court fees & costs).
3. The third criterion is an affordable repayment option.
Whenever possible an affordable repayment plan should be agreed with the customer.
4. The fourth criterion is the FairLife Family and display of the FairLife Mark.
The licensee should display the FairLife Mark where practical.
When passing on or selling customers’ debt:
I. FairLife Debt should be clearly labelled.
II. The licensee should, where it is equally in the customer’s best interest, favour companies with a relevant FairLife Mark.
The FairLife Mark is a mark of integrity, awarded based on the provider’s own declarations.
The first criterion is highlighting free debt management advice.
The second criterion is to inform customers that they can get free help from a FairLife Debt Advice group (or a group on FairLife’s debt Advice register). Customers must be told that seeking help may:
- enable them to regain control of their finances by finding an appropriate solution
- help them to receive breathing space while free advice is being sought
- reduce the likelihood of legal action being taken against them
The second criterion is the treatment of non-FCA-regulated debt
The licensee must treat unregulated debt in the same manner as regulated debt, where possible affording the debtor the same benefits and protections. The licensee should follow the spirit of the FCA principles concerning debt recovery as well as its rules.
Those following the spirit of criteria 2 will add nothing, or very little, by way of interest, fees and costs to customers’ debt, with the exception of court fees and costs.
The third criterion is an affordable payment option
Whenever possible, an affordable repayment plan should be agreed with the customer. Should enforcement action be taken against customers, such as the use of bailiffs or court orders, the organisation should evidence that:
• Where possible, they have conducted an affordability assessment including the income, expenditure and other debts of the customer AND
• The customer has disposable income or assets to make the payment without causing financial hardship OR
• They have tried to contact the customer to set up an affordable repayment plan
Criteria three does not prevent letters being sent conveying that, if payments are not received, court action will be taken.
The fourth criterion is the FairLife Family and display of the FairLife Mark.
When passing on or selling customers’ debt, the paperwork sent should either show the FairLife Mark or state clearly that the debt is FairLife Debt.
The FairLife Family criteria is a request that when passing-on customers debt, the licensee favours companies with a relevant FairLife Mark or companies on the relevant FairLife register . The company must also be in the customer’s best interest and favour the company must not breach any regulation or industry best practise guidance on fair competition.
As more companies join the FairLife initiative it will become easier for licensees to stay within the FairLife Family. FairLife Ltd will also work with its Mark holders to identify companies they deal with and these companies will be approached to take a FairLife Mark. Where a company is known to meet the criteria, but does not wish to adopt the Mark, it may be added to the FairLife register for that Mark.
For some firms, placing the FairLife Mark on paperwork will involve considerable management time and subsequent workload. For this reason a one year lead time is allowed from the date the mark is adopted and it is accepted that the mark be place where practical. If using the mark is likely to take more than one year to implement FairLife Ltd should be contacted.
To download a summary of the Debt Recovery Mark click here
To download a licence for the Debt Recovery Mark