Citizen’s Advice criticise council debt collection practices

8 Jul 16

Heavy-handed tax debt collection practices being used by councils are pushing some residents further into debt, the charity Citizen’s Advice has said.

A report published today warned that councils often add charges to debt, send in bailiffs and take court action before exploring manageable repayment options.

Citizen’s Advice asked more than 1,000 people in England who had a council tax debt about their experience. Over half (54%) of people said the council’s actions made it harder to clear their debts, 71% said they had seen charges added to their bills and 48% had been visited by a bailiff.

The charity said that these techniques can be counter-productive because they place debtors under more pressure, and can actually delay the repayment of the debt.

In May, it emerged that council tax arrears had hit record levels, which was promoting a more widespread use of bailiffs.

This has been driven by the localisation of council tax support schemes, the consequence of which is that 80% of councils in England now require low-income families to pay some of their council tax bill.

Gillian Guy, chief executive of Citizen’s Advice, said: “Some councils are too quick to crack down on people falling behind on council tax.

“Of course it’s right people should repay their council tax – but calling in bailiffs, adding on extra charges or forcing someone to pay the rest of the year’s council tax in one lump sum can make the situation worse for everyone.”

She observed that some councils have “developed much fairer approaches to collecting debt and as a result get money back faster.”

According to Guy, simple steps such as improving communication and offering a realistic payment plan can lessen the burden on debtors and ensure councils are paid back.

“It is really important that councils review their debt collection practices to make sure they are helping people to overcome their debt problems rather than making their financial problems worse”, she added.  

Of the people quizzed in the report, over half (56%) said they were cutting back on food and heating because of the council debt, and 26% had sold or pawned their belongings.

The report recommends that councils encourage people to seek free debt advice on reminder letters, and promote existing hardship funds and their eligibility requirements more clearly.

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