Throughout 2018 headlines declared “consumer debt crisis”. With threats of the “consumer debt bubble” ready to burst, there only seem a slew of stories, without any answers. Consumer debt is one we are well acquainted with at AYOM. It is common sources of grief for debtors should it get out of control. Barclays however, have an answer.
Blocking consumer debt
Barclays customers feeling they may struggle with certain spending habits can now opt to block particular charges. These include restaurants, pubs, betting shops, betting sites and takeaways. The bank is able to put certain retailers within distinct “buying groups”, recognising the type of purchases made. This means vulnerable customers can stop themselves spending unnecessary money frivolously.
The move has been supported by numerous people including TV personality Martin Lewis. Research used by the bank used his “mental health policy institute”. With mental health & debt being a problem at the moment, Barclays felt they needed to offer an answer.
Chief Executive of GambleAware, Marc Etches, also offered opinion on the move. “GambleAware welcomes this initiative. We hope will encourage other banks to do the same.”
“There are 340,000 problem gamblers in Britain and a further 1.7 million at risk. Initiatives like this can play an important role in helping to reduce gambling-related harms.
A debt collector’s view
AYOM are happy to see the move by Barclays. From a debt collection perspective, it will help consumers manage financial commitments. Often, we find our consumer debtors can be vulnerable when it comes to financial planning. Money can be very quickly spent in places like pubs and restaurants without even realising. Ensuring customers are aware they should limit their spending this way will help them and collectors alike. If we are attempting to resolve rental arrears or credit card debt, blocking unnecessary payments ensures consumers have money to repay these debts.
AYOM Director Mr Logan commented on the matter. “We are happy to see banks doing their bit to help curb unnecessary spending. It also greatly benefits a consumer’s financial management.
“Managing personal finance is such a big roadblock to resolving debts and is often beyond our control as collectors. This move will help us resolve a good percentage of debts quicker. We also find the quicker we resolve debts, the happier both sides can be to move on with their lives.”
“Our only warning would be to the retailers themselves to be careful of granting services before the customer makes payment. Many business listed in the categories chosen will require customers to do so. Pub chains, bookmakers and pubs all usually require payment up front. Those that don’t however may need to be aware and have a system in place. They will need to make sure a customer can pay if they receive a service first before payment.”
New technology
AYOM welcomes new banking technology able to help consumers manage money. In November Lloyd’s introduced a new location tracker on their cards to prevent fraud. While not directly affecting debt collection, it will indirectly protect funds which can be used to pay off outstanding debts. It allows consumers to feel safe about their money which makes our job as mediators much easier.
To find out more about our role as collectors, take a look at our blog section for more stories. If you’d like to speak to AYOM regarding commercial or consumer debt collection; you can call 0800 130 3357. You can also get in touch via email at enquiries@ayom.co.uk.