Call for fair treatment of debt sold to third parties

● Plea comes from chief of Lending Standards Board ● Set to deliver message at 10 May meeting in capital

Scottish businesses in distress that have had their debts sold to a third party should expect the same fair treatment from the purchaser, the head of a body that promotes fair lending has argued.

David Pickering, chief executive of the Lending Standards Board (LSB), a self-regulatory oversight body, will deliver the message at a meeting of MBM Commercial’s Financial Claims Network in Edinburgh next month, when he will meet Scottish business customers who have raised legal complaints about banking behaviour.

Pickering will be joined by Liz Thompson, the LSB’S head of compliance, and Cat Maclean, head of dispute resolution at MBM Commercial, who has been representing clients impacted by so-called “vulture” funds.

“One of the LSB’S key aims is about affording protection to small business customers through the Standards of Lending Practice for business customers,launchedinmarch 2017,” the LSB chief said, ahead of the 10 May meeting.

“The Standards apply to loans, overdraft and credit card products provided to small business customers with a turnover of up to £6.5 million.

“When a business gets into financial difficulty it can be a difficult and distressing time for the individuals behind that business,” added Pickering, who spent 24 years with Nationwide Building Society.

“Selling a portfolio of debt is a commercial decision for each registered firm, however, the Standards seek to ensure that firms undertake appropriate due diligence to ensure that when debt is sold, impacted customers continue to be treated fairly. The Standards expect the customer to be treated in a manner equal to that of their original lender.”

The LSB said the Standards of Lending Practice are supported by a “robust” oversight regime to ensure that registered firms are “demonstrating appropriate behaviours” and are achieving the “right customer outcomes”. Where a registered firm fails to measure up, the body has a range of sanctions at its disposal.

“We recognise that the Standards are forward looking and are putting in place protections for the future,” said Pickering. “There is work being undertaken by separate organisations which are looking at customers who already have a complaint or who may have suffered a detriment in the past.”

Attendees will hear from Maclean about her work dealing with Clydesdale’s asset transfer to a Us-based fund. Pay TV giant Sky has notched up a 10 per cent hike in earnings for the first nine months of its year despite a “challenging” consumer market as it remains at the centre of a bidding battle. The group – which is being fought over by Rupert Murdoch’s 21st Century Fox and US media group Comcast – said it added a further 38,000 customers in its third quarter, taking the total house holds reached by its services to 22.9 million. It posted group underlying earnings of £1.7 billion.