//It’s time to stop and think about rent and Council Tax data sharing

It’s time to stop and think about rent and Council Tax data sharing

At the end of September the Financial Inclusion Commission published a report by Policy in Practice claiming that the incorporation of rent payment data into the credit referencing system would improve access for tenants to lower cost credit.  And tomorrow, the House of Lords is set to discuss a Bill put down by the Crossbencher, and founder of the Big Issue, Lord Bird, which would make it compulsory for lenders to take account of “rental payment history and council tax payment history when assessing a borrower’s creditworthiness.”

However, in our view the sharing of rent, and indeed Council Tax repayment data, could be dangerous for people who are struggling financially – increasing their level of exclusion or raising the cost of credit that they will have to pay.  It is necessary to pause the drive to rent and Council Tax data sharing pending a much more rigorous evaluation of it pros and cons.  For that reason, we are writing to Members of the House of Lords and asking that they oppose Lord Bird’s Bill.

Commenting on Lord Bird’s Bill, CfRC Director, Damon Gibbons, said:

“The evidence base for sharing rent and Council Tax data with credit reference agencies, and through them the wider credit industry, is flimsy at best.  Adverse impacts – such as worsening credit scores for people in rent arrears – have routinely been played down, and the benefits for people with good payment histories overstated.  A much more rigorous analysis is needed, and policy makers should not move forwards on this issue until it is available.  For that reason we urge Members of the House of Lords to vote against Lord Bird’s Bill tomorrow.”

A full briefing has been provided setting out our detailed objections, and is available here.

By |2017-11-23T10:26:17+00:00November 23rd, 2017|Blog|1 Comment

About the Author:

Damon is the Director of the Centre for Responsible Credit.

One Comment

  1. Paul Rickard November 23, 2017 at 2:39 pm - Reply

    Thanks for this thoughtful piece.

    It’s good to hear that some HA’s are being creative about rent payments and proactive in offering support where it is needed. However, it would appear that whether the social housing tenant can expect this kind of flexibility is as much of a lottery as the situation with local authorities and DHP’s.

    Sadly, many of the larger HA’s are restructuring staff teams with an emphasis away from support and towards income recovery and maximisation. Local knowledge about services that could help alleviate hardship is being lost at a time when the chaotic roll-out of UC is likely to increase demand considerably. At the same time, some HA’s are seeking to shift the resulting pressure on revenues from themselves to their tenants by demanding over- or advance payments of rent. This policy is effectively Robin Hood in reverse with wealthy and increasingly corporate bodies putting their hands in the pockets of some of the poorest people in the country.

    Is it time for an audit of what social landlords are up to in this respect? With 3 million properties in Britain, their policies are likely to have a serious impact

    I note your proposal for information to travel to HA’s from CRA’s. Even if we were successful in getting HA’s to sign up to good
    practice in this respect, won’t GDPR make this problematic, whichever direction the data is travelling in?

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