Virtual visits and controlled goods agreements

We welcome the High Court judgment issued by Master McCloud, Queen’s Bench Division, on controlled goods agreements (CGA) with regards to virtual visits.

Current regulations regarding CGAs

Under the Taking Control of Goods Regulations 2013 (TCOG), if payment is not made in full during a visit by an enforcement agent, the debtor will be asked to enter into a controlled goods agreement (CGA). This means that the goods are now under the control of the enforcement agent and may not be removed or sold by the debtor.

The enforcement agent may reattend at any time, forcing entry if necessary, to remove the goods for sale or safekeeping.

Virtual visit ruling

Master McCloud was asked to rule on whether a CGA could be made during a virtual visit to the debtor by video conferencing.

The current TCOG regulations state that a visit needs to take place before goods can be taken into control, but do not state whether this needs to be a physical visit. As a result, Master McCloud has invited the Ministry of Justice to review the judgment and provide guidance on whether amendments to the regulations are required.

This guidance will need to cover the processes to be followed regarding re-entry under a CGA from a virtual visit, as well as what fees could be charged.

Where does that leave enforcement?

Under the current regulations, a CGA obtained during a virtual visit will not provide the power for the enforcement agent to re-enter the property or charge related fees, so we will continue to recommend physical visits to our clients until any amendment is made to the regulations. If regulations are changed, we will update our procedures to accommodate the changes.

Engagement with debtors

We use a wide range of methods to engage with debtors as early as possible in the enforcement process, including phone calls, emails, SMS, Live Chat and our debtor app and look to resolve the case before the need for a physical visit. This is of benefit to both the creditor, who receives payment more quickly, and the debtor who avoids incurring further enforcement fees under the TCOG regulations.

If more can be done to encourage payment by specifying the powers of virtual visits, we welcome that change.