Difficulty accessing government-backed loans or other emergency funding
Protect yourself by making records of all your communications and interactions with the bank and their impact (both financial and psychological) so you can prove what’s happened if you need to complain or appeal later.
What’s on offer?
Under the Coronavirus Business Interruption Loan Scheme (CBILS), the government is guaranteeing £300 billion worth of government backed loans with attractive interest rates and says ‘any good business in financial difficulty who needs access to cash to pay their rent, the salaries of their employees, pay suppliers, or purchase stock, will be able to access a government-backed loan’. But research from the BBC has suggested between 800,000 to 1 million businesses could be forced to close down because they can no longer cover rent, salaries and other expenses.
What’s gone wrong?
Small business owners are saying the loan scheme is failing them as banks including HSBC, NatWest, Barclays and Lloyds ‘take advantage’ of them at their most vulnerable. The scheme is designed to offer companies up to £5 million interest free for the first year, with the Government pledging to underwrite 80% of the risk to get banks on board. But already there have been reports of problems such as:
- Many of the Treasury’s ‘approved’ lenders are lending at interest rates between seven and 30% which is well above the base rate of 0.1%
- Some lenders have demanded at least £100,000 in collateral, meaning company directors risk losing their homes, because the collateral is a charge on personally owned property, if they need to borrow more than £250,000 to save their business.
- Some lenders have turned down requests for less than £25,000
- Some are refusing to provide money if the applicant has money in the bank.
- Some want to deal only with their existing business customers because they understand the business more.
All in all they’re trying to impose their existing ways of processing, protecting themselves and decision making on desperate customers who need quick easy and fair structures to navigate, ignoring the expectations of the government.
The problem may be solved by the Government underwriting 100% of the risk.
Getting poor service from banks or other financial services
There have been lots of examples of poor service from banks or other financial services such as building societies during the coronavirus crisis. Keep records so that you have evidence to support your complaint about the way you’re being treated.
What’s gone wrong?
Here are some examples of what people are encountering:
- The regulator the Financial Conduct Authority ( the FCA ) has had to tell banks and building societies not to repossess people’s homes during the coronavirus crisis. Where a possession order is already in existence it must not be enforced.
- The FCA has also said not to charge fees to struggling home buyers when they apply for the 3 month ‘payment holidays’ granted as a result of the pandemic.
- The FCA has had to tell them not to investigate the customers’ circumstances before saying yes to a payment holiday. Banks can continue to charge interest but are not allowed to levy any other fees.
- Mortgage holders have reported waiting for hours to get through to banks to ask for help. Some claimed they were waiting for as long as three and a half hours. Many expressed their anger at the lack of a simple online form that could be used to request a payment holiday.
The financial institutions aren’t coming out of this crisis improving their already poor reputations.
Problems with Universal Credit
An explosion in demand
Between 16th and 31st March, 950,000 people applied for universal credit due to coronavirus in the UK lockdown, despite the government’s job support schemes offering 80% of earnings to employees and the self-employed who cannot work. That’s 850,000 more than usual in a two week period.
Applicants for universal credit include employees laid off because they cannot be furloughed, and some self-employed people who don’t qualify for the separate support scheme, which is the offer of 80% of average profits over the last three years up to a limit of £2,500 per month for the next three months.
The Department of Work and Pensions said it had moved more than 10,000 staff to deal with claims and is recruiting more. They say officials have been calling people who applied online to try to speed claims up, and that they are making tens of thousands of phone calls per day.
No wonder they’ve been in chaos. Universal credit delivery will be the key to many families avoiding real hardship but it looks as though lots of claims will fail to achieve to do so.
What’s gone wrong?
- Difficulty getting through to UC and being held in a telephone queue for hours.
- Claimants left for days whilst their identity is verified.
- Claimants left without any money for 5 weeks.
- Claimants who face having no money at all for 5 weeks are being offered a loan (an ‘advance’) which will be clawed back from future UC payments. See our blog – Universal Credit: The trap of getting an advance. The Labour Party is saying that “the government should turn advances into non-repayable grants to end the five-week wait and make sure people get the support they need quickly at a level that genuinely protects them from poverty.”
If you’re having any of these difficulties don’t just do nothing. You’ve got time on your hands in lockdown. Keep records by following our guidance [here] and have evidence to support your appeal or complaint.
Difficulties with rogue suppliers and scammers
There is a rapidly increasing variety of scams related to the Coronavirus (COVID-19) outbreak.
Some examples are:
- Fake products online
Scammers are taking advantage of worried consumers by selling fake products ranging from fake testing kits to homemade hand sanitiser and from ‘miracle cures’ to IV drips.
- Doorstep scams
Rogue traders are cold calling households and offering to spray paths and front doors to get rid of infection.
Fraudsters have been posing as NHS staff asking for donations or offering to help people with their shopping in return for payment. They will just steal your money. Be vigilant before accepting help. There are lots of wonderful volunteers doing the shopping for free. Make sure you get an honest one.
- Email scams
Criminals are sending emails claiming to be from the government, the World Health Organisation or from a bank or loan company Links in these emails may infect your computer or take you to a page where you are asked to disclose your confidential financial information.
Don’t be taken in. Try to be vigilant. But if you’re conned and most people have been at some time, Just think – how can I prove this to someone who doesn’t know anything about the events.
What can you do?
- Record the evidence of the scam or fraud and keep it secure using ONRECORD.
- Try and get a photo of any stranger that comes to your door. If they’re a scammer, you’ll have the person’s face to show.
- Take notes of vehicle registration numbers or, even better, pictures of the vehicle they used. Try to get photos of others who might have accompanied them.
- If it’s an email scam you’ll have the email, a statement showing the money has gone and your description of what happened.
If your landlord is behaving unreasonably keep records of the problems you’re encountering. Keep a record of everything that they send or say to you and of how you respond. Save copies of all correspondence to support your evidence. Follow our guidelines in this useful video and be sure to record the impact, which includes any financial losses or unreasonable expenses and any psychological harm.
I’m a tenant. What are my rights?
As a result of the coronavirus crisis the government has relaxed eviction rules and told landlords they must be flexible to help keep tenants in their homes during the outbreak. The government has urged landlords to support tenants so that they can stay in their homes wherever possible.
There’s a new Coronavirus Act 2020 which says that landlords in England and Wales need to give 3 months’ notice before they can start eviction procedures. In Scotland, this extends to six months.
If you are renting your home through social or private tenancies you need to know:
- You still need to pay rent and keep to the usual terms of your rental agreement, if you can.
- If you’ve lost income because of the outbreak and can’t pay all or some of your rent, talk to your landlord to see whether you can come to an agreement. For example your landlord might be able to offer reduced or suspended payments until you can find work. They might even give you affordable options for repayment of the outstanding rent in the future.
- Bear in mind that through the new coronavirus rules, many landlords are able to benefit from a 3 month mortgage payment holiday, which has been extended to Buy to Let mortgages. Landlords are being encouraged to pass these savings on to their tenants, but they don’t have to.
- You might qualify for financial support in the form of housing benefit to cover your housing costs if you’re not now earning, or earning a reduced amount. Housing benefit and Universal Credit have both been increased to cover housing costs and help those most in need. Check to find out what you’re eligible for.
- Your landlord continues to be responsible for keeping your home safe. Essential repairs and maintenance checks, such as boiler servicing, should still be carried out where possible and within social distancing guidelines. Urgent issues including heating breakdowns, problems with your water supply, suspected gas leaks, burst pipes, a leaking roof and security risks like broken windows or doors should also be dealt with.
- If you’re in need of emergency housing your Local Authority can sometimes help you find somewhere to live. They can also put you in touch with support groups in your area. Housing charities, including Shelter, can also help if you’re at risk of losing your home.
- If your tenancy ends during the lockdown and you’ve been unable to find a new home because of the rules, or you’re unable to move because you’re self-isolating, ask your landlord if you can extend your tenancy until the measures are relaxed. Ask for a month-to-month agreement (a ‘periodic tenancy’) if you don’t want to commit to a new long-term tenancy agreement on your home.
- The government has advised that home moves should be cancelled until after social distancing measures have been relaxed, so put off your move if you can. But if you’ve already signed a tenancy agreement, you’ll still have to stick to the contract, which means paying rent even if you haven’t moved in. Lots of landlords are being flexible, so talk to yours and see whether you can postpone your move-in date if necessary.
- You could also look into cancelling your tenancy if you can, although this might mean you have to pay termination fees. You might also lose any deposits you’ve paid.
- Overall tenant rights still apply, and equally your landlord is still responsible for everything they have agreed to in the tenancy agreement.
Whereas most of the population appear to be sticking to the rules and behaving well, there are going to be tensions with being isolated or in lockdown that can easily bring out the worst in all of us. These unprecedented circumstances can create new neighbour disputes or add to an already contentious argument, often leading to more stress and financial loss. Keep a record of everything your neighbour does and what you do. Dates are necessary. Take photos, videos or audio recordings and make a written record.
What can I do?
For problems such as persistent rubbish in your garden, loud DIY at night, flying drones over your garden, teenagers riotous behaviour etc. video evidence it. Most phones have this capacity now, so it’s never been so easy. You can then provide evidence when you make your complaint to the Local Authority or the police (or, if you’re really desperate, to a solicitor).
Be polite when you’re trying to resolve a dispute. If you are showing your neighbour the evidence you have recorded, remember that you want the problem to stop, not get worse. Don’t aggravate the problems. You certainly don’t want to take your neighbours to court if you can possibly avoid it. Those kinds of disputes are usually very expensive and cause more anger and hostility.
Measures announced over recent weeks to tackle coronavirus have seen people’s day-to-day lives drastically altered. In lockdown couples and families are trapped together for longer than ever before. This can lead to terrible consequences for some people. More killings have been reported during lockdown than in normal circumstances. The government acknowledges that the order to stay at home heightens anxiety for those who are experiencing or at risk of domestic abuse.
Where can I get help?
See our page [here] on domestic abuse and our videos on YouTube ‘Domestic Abuse: what is controlling and coercive behaviour’ and ‘Domestic Abuse: Make a plan in advance’.
There is help and support available for anyone at risk of abuse. This includes the police, online support, helplines, refuges and other services which continue to function despite the lockdown.
If you are worried that someone you know may be a victim of domestic abuse, tell them that the police and support services are still there to help and direct them to sources of support.
Remember Domestic abuse is not just physical violence but includes:
- coercive control and ‘gaslighting’
- economic abuse
- online abuse
- verbal abuse
- emotional abuse
- sexual abuse
The government supports and funds several charities who can provide advice and guidance and they are in regular contact with the charity sector and the police to ensure that these support services remain open during lockdown.
Here is the link to the government guidance for victims of domestic abuse dated 14th April 2020.
The social distancing rules do not apply if you need to leave your home to escape domestic abuse.
Difficulties in dealing with government or local government departments
The Chancellor has extended the Coronavirus Business Interruption Loan Scheme (CBILS) till the end of June to avoid businesses having to consider starting redundancy processes. The governor of the Bank of England has told the Banks to get a grip and make the business loans happen. The Home Office has dealt with the issue of increased domestic abuse cases during lockdown by allowing the lifting of restrictions if victims need to flee violence. And the Ministry of Housing, Communities and Local Government has allowed local authorities pushed to the brink of financial failure another £1.2 billion as I write this on 18th April.
Which central government departments should we watch?
One to watch is the Dept of Work and Pensions. Will they manage to get the Universal Credit applications under control and being processed smoothly and correctly? Will they get the call wait times down and the identity verification time lags reduced? We somehow doubt it. Will they end the dreadful “advance” rules and stop the automatic 35 day wait before the first payment is made? Probably not unless there’s enough complaints and protests about the unfairness.
What other issues are likely to be raised as the coronavirus crisis lessens and people start to want their problems and complaints addressed.
Some of our predictions are complaints about:
- The treatment given to some coronavirus patients during admissions in hospitals and claims of poor care and negligence
- Inadequate supplies of PPE.
- The treatment and standards of care given to residents in care homes.
- The treatment of some prisoners in our prisons during the crisis and the failure of the duty of care to protect prisoners from personal injury and harm, including from abuse and neglect.
- The harm to ‘at risk’ children left in the care of their parents during the restrictions. It was reported that “A worryingly low number” of vulnerable children allocated a school place to keep them safe during the coronavirus crisis were actually turning up. It’s thought there will be a coronavirus impact in terms of increased child sexual abuse, grooming and online abuse.
- The way Courts handled cases during the crisis with unreasonable expectations of the success of using Skype for remote hearings.
Whatever the problem you’re experiencing during this crisis, don’t just do nothing. Keep records of what’s happening so when the time is right you’re ready to take action. Don’t rely on your memory. It won’t be good enough especially if it’s a difficult problem lasting a long time with lots of events and twists and turns.