New legislation, Breathing Space, came into effect on Tuesday 4th May 2021, with the principle aim of supporting individuals who may be experiencing a debt problem. Two types of Breathing Space will be introduced:
- A standard 'Breathing Space': this gives eligible debtors legal protections from creditor action for up to 60 days. The protection includes pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts
- A mental health crisis 'Breathing Space': only available to someone who is receiving mental health crisis treatment, it has some stronger protections and lasts as long as the person's mental health crisis treatment, plus 30 days (irrespective of how long the crisis treatment lasts)
Our dedicated Breathing Space Team
We have set up a team of trained staff who will be managing all Breathing Space requests across our Commercial business. They will be on hand to provide support and guidance to you and your customers.
If a customer has a monthly instalment plan and has invoked Breathing Space, please send all information to COVID.brokerqueries@uk.rsagroup.com
Please include the following information in your submission;
- Customer name
- Policy number
- All information supplied by the debt advice service (this will include whether they are entering into a standard Breathing Space or a mental health crisis Breathing Space)
Once we receive this information, we will place a hold on the debt and follow all Breathing Space rules.
Please note, it is our expectation that the customer should engage with a regulated debt advice service to explore the options available to them. It is our understanding, as per the legislation, that the debt advice service will progress the necessary steps for the customer to enter into a Breathing Space. This means we would expect to receive notification either from the debt advice service or the insolvency service. This may be received via email, or post or notified via the dedicated central electronic register.
We appreciate customers may approach you directly and once we have been notified by you, we will ensure our customers are treated with sensitivity and that we support them as much as possible.
Third Party Finance
For any customers who have a monthly instalment plan with third party finance providers such as Premium Credit or Close Brothers, please contact them directly.
Maintaining regular monthly payments
We will continue to collect the usual monthly instalments from the customer, however, if the customer is experiencing further financial difficulty, we have a number of options that may be available to them.
Our team will be on hand to assist with additional financial support measures, however, we will not communicate with the customer directly and instead liaise with the appointed debt advice service who is managing the case on the customer's behalf.
During the Breathing Space period, we will liaise with the debt advice service to understand how we can address the needs of the customer once the Breathing Space period has expired.
Help for customers
This document from the FCA also has important information about access to a variety of debt advice services to help your customers.
Questions?
If you have any questions regarding this communication or in regard to the Breathing Space legislation, please speak to your usual RSA representative.