UK charity to offer free debt advice service in Ireland

UK charity StepChange plans to offer a free and independent debt advisory service in Ireland from November 16th after securing €6 million in funding from five retail banks here.

The online and telephone- based service, located in the English city of Leeds, will offer advice to borrowers struggling with multiple secured and unsecured debts. It expects to help about 3,600 people a year in Ireland.

AIB, Bank of Ireland, KBC, Permanent TSB and Ulster Bank have agreed to provide €2 million a year between them over the next three years to fund the service.

Phone lines will be open from 9am to 5pm with the service provided by two team leaders, 12 debt advisers and an administrator.

All advice provided by StepChange will be free. Where an insolvency solution is recommended StepChange will refer the borrower to a practitioner who will determine the level of charges involved in following that route.

‘Big problem’

Mike O’Connor, StepChange’s chief executive, said: “It’s our mission to rid society of problem debt. We’re just as willing to help an Irish person as a British person. The debt situation in Ireland is improving but it’s still a big problem.”

He said StepChange would seek to determine the potential repayment capacity for a borrower before approaching creditors with a proposal.

StepChange dipped its toes in the Irish market in 2013 by assisting the Central Bank of Ireland in a pilot scheme for a multiple-debt framework. This ran into difficulties as a large number of credit unions declined to participate.

However, it believed there was merit in its own service being set up here and began negotiating with the banks through their industry body, the Banking and Payments Federation Ireland (BPFI).

Plans to register

Mr O’Connor said StepChange plans to register with the Charities Regulatory Authority here. It is a registered charity in England and Wales and is authorised and regulated by the UK’s Financial Conduct Authority.

StepChange was founded in 1992 with the aim that no one should have to pay for debt advice. It has offices in eight locations in the UK and employs 1,200 staff.

More than 600,000 people contacted the service last year with combined debts of about £400 million (€542 million). It has operated in Northern Ireland since 2001 in partnership with the Limavady Community Development Initiative.

The BPFI said the service would “provide an additional channel through which people in arrears can obtain free, independent advice and support”.

“BPFI member banks remain fully committed to engaging and working with people who are in financial distress and, wherever possible, to keeping them in their homes,” it said.

The Irish market is already served by a number of not-for- profit groups, including Mabs and the Irish Mortgage Holders' Organisation, which has arrangements in place with AIB and KBC.