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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

05 JUL 2011

New CAB research on debt and disability

The Citizens Advice Bureau (CAB) has published an interesting piece of research on debt and disability. The work is entitled, "Double disadvantage: The barriers and business practices making debt a problem for disabled people." The report is based on evidence from CAB clients in England and Wales and has a particular focus on clients of the Financial Inclusion Fund  (FIF) disability project. This is a partnership between Citizens Advice, RNIB, Action on Hearing loss, Contact A Family and Mencap to give free holistic debt advice to blind and visually impaired people, people who are deaf or  hard of hearing, parents of disabled children and people with learning difficulties.

The report makes five main findings based on the experience of these CAB clients:

 - Barriers to employment, low incomes, financial exclusion and extra costs related to illness or disability were all frequently cited as reasons for debt problems. Disabled CAB clients were also more likely to use high cost credit than non-disabled CAB debt clients and were more likely to have fuel debts.

 - Service providers and public authority creditors are not consistently recognising the needs of disabled people or making reasonable adjustments, despite the requirement under Section 20 of the Equality Act 2010 to do so.  

- Creditors are also not consistently following the rules and guidance on business conduct for their sector in a way that meets the needs of disabled people.

 - The CAB found evidence of unfair business practices that both contributed to the debt problems disabled people faced and made these problems harder to deal with. This  included service providers and public authority creditors failing to communicate with their disabled customers in an appropriate format; high-pressure sales practices or poor explanations of products and liabilities; and aggressive debt collection practices. 

This combination of barriers and unfair business practices disempowered many of these disabled people as consumers. Their choices were constrained by both financial difficulties and the failure of their creditors to take account of their needs.  Many lacked the resources to challenge creditors about unfair practices or assert their rights under consumer protection or equality law.

However, the intervention of a  debt adviser helped to break this cycle of disadvantage by supporting disabled CAB clients to engage with their creditors from a more powerful position.  But  to be effective  debt advice services need to be well tailored to the specific needs of different groups of disabled people.

Consequently, the CAB concludes that disabled people in financial difficulties do not always get fair treatment and good service from their creditors.  The CAB argues that ensuring that service providers and public authority creditors meet expected standards of conduct consistently for all their customers goes to the heart of both consumer protection and equality legislation.

The report concludes with four key challenges for businesses, public authorities and policy makers.

- Regulators need to do more  to better align consumer protection legislation and the Equality Act 2010 in their strategies to ensure disabled people are not disadvantaged by unfair business practices that fail to take account of their needs

- Service providers and public authority creditors need be sure that best practice in meeting the needs of disabled customers is firmly embedded throughout their business.

- Future commissioning of debt advice needs to ensure that disabled people have effective access to services  like the FIF disability project that are tailored to their specific needs.

- The CAB urge the Government to consider the issues raised in this report when developing its consumer empowerment strategy.  The CAB evidence locates vulnerability firmly in the business practices that either help or hinder disabled people to get choices, better deals and better treatment.

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