Schemes, guidance & codes

This section covers references to the CFS in formal guidance documents and what the endorsements say.

  • Q:What can I do if my creditor has not heard of the CFS?


    The CFS is sponsored by Money Advice Trust (MAT), the British Bankers’ Association (BBA) and Finance & Leasing Association (FLA). However, many other types of creditors also support the CFS. Usage of the CFS is growing with a number of utilities providers adopting the CFS. The CFS is also being used by some Government departments.

    If a creditor is unfamiliar with the CFS you can:

    • Direct them to this website to get more information;
    • Use the sample letter to explain the CFS to them; or
    • Ask them to contact Money Advice Trust.
  • Q:What if creditors refuse offers of repayment submitted using the CFS?


    If offers of repayment are refused by a creditor when using CFS, the following actions should be taken:

    • The budget sheet should be reviewed to check that figures have been inputted correctly;
    • Ensure an explanation has been included in the notes accompanying the financial statement summary sheet where trigger figures have been exceeded;
    • Check that the creditor is aware of the CFS principles about how offers are made. Send the sample letter to the creditor to explain these in more detail; and
    • Check whether the creditor’s trade association endorses the CFS in their code of practice.

    If the creditor still does not accept the proposed CFS offer you should ask them to reconsider following the normal money advice process. If you feel the creditor is not being fair and reasonable in how they responded to your request, you should consider making a complaint using the creditor's complaints procedure. You could consider taking the matter further if you have exhausted the creditor's complaint procedure and not arrived at a satisfactory outcome by contacting the Financial Ombudsman Service.

  • Q:What does the Lending Code say about the CFS?


    The Lending Code replaces the Banking Code from November 2009. This is a self-regulatory code setting minimum standards of good practice for creditors when dealing with consumers and micro businesses in the UK.

    The Lending Code is endorsed by the British Bankers' Association, The Building Societies Association and The UK Cards Association. A full list of subscribers to the code can be found on the Lending Standards Board website.

    The CFS is referred to under Section 9 ‘Financial Difficulties’ paragraphs 204-212. For more information view The Lending Code.

  • Q:What does the FCA Consumer Credit Sourcebook say about the CFS?

    The Financial Conduct Authority’s Consumer Credit Sourcebook (CONC) is the specialist sourcebook for credit-regulated activities. It contains several references the Common Financial Statement.

    Guideline 7.3.13:

    A firm seeking to recover debts should have regard, where appropriate, to the provisions in the Common Financial Statement or equivalent guidance.

    Guideline 7.4.12:

    In considering the customer's repayment offer, a firm should have regard, where appropriate, to the provisions in the Common Financial Statement or equivalent guidance.

    Guideline 8.5.2:

    The format of the financial statement sent to lenders on behalf of the customer should be uniform and logically structured in a way that encourages consistent responses from lenders and reduces queries and delays. Firms may wish to use the Common Financial Statement facilitated by the Money Advice Trust or an equivalent or similar statement.

  • Q:How is the CFS incorporated into the Debt Arrangement Scheme (DAS)?


    DAS is a debt-management tool introduced by the Scottish Government. It is designed to help people in debt manage their repayments. DAS can also provide protection from creditors making a client bankrupt or enforcing debts by diligence. Access to the scheme is only via an approved money adviser.

    Professional guidance written for approved DAS money advisers refer tos the CFS under section 4.2.7:

    “Use, as a base line, the trigger figures for expenditure as detailed in the nationally agreed, BBA and MAT partner agencies income and expenditure form (Common Financial Statement). However, care must be taken to ensure that individual circumstances are taken into account and where necessary include a letter of support.”

    For more information please view the DAS approved money adviser guidance.

  • Q:What does the Finance & Leasing Association (FLA) Lending Code say about the CFS?


    The FLA is an industry body representing the asset finance, consumer finance and motor finance sectors across the UK. The FLA Lending Code sets out the commitments and principles which FLA members must follow.

    The 2012 edition of the FLA Lending Code includes the following section on CFS.

    1D. 14 If you have debts with many lenders, a debt-counselling organisation may complete a Common Financial Statement (CFS) (or an equivalent that is acceptable to us) on your behalf, which we will accept as the basis for negotiations with you in drawing up a plan to manage your debt.

    1D.15 We will only challenge a repayment offer based on expenditure falling within the figures of the CFS if we have reasonable cause to believe that the amount of your income and expenditure may be incomplete or inaccurate.

    1D.16 Where a personal loan was used to purchase an asset – for example - a motor vehicle, we may draw to your attention that you may wish to consider selling the asset to reduce your personal loan commitments.

    1D.17 We follow the CFS Creditor Good Practice Checklist which promotes clear communication between lenders and their customers.

    For more information view the FLA Lending Code.

  • Q:What does the Office of Fair Trading (OFT) Second Charge Lending Guidance say about the CFS?


    The OFT is the UK's consumer and competition authority. The Second Charge Lending Guidance sets out the minimum standards the OFT expects from businesses engaged in second charge lending if they are to be considered fit to hold a licence. It covers the entire lending process including selling techniques, customer care, and practices around the management of arrears.

    Section 5.9 of the guidance states:

    “When a borrower is experiencing difficulties, lenders should seek, wherever possible, to negotiate reasonable repayment plans which reflect the circumstances of the individual borrower and are based on an assessment of affordability having regard to the borrower's income and other financial commitments (for example, as would be disclosed in a Common Financial Statement)”.

    For more information please view the OFT Second Charge Lending Guidance.

  • Q:What does the Credit Services Association (CSA) say about the CFS?


    The CSA is a national association representing the interests of organisations involved with debt collection, debt sale and debt purchase. As part of its function the CSA aims to promote best practice throughout the industry. The CSA has developed its Code of Practice which all members must adhere to.

    The CSA Code of Practice states that members should:

    “Take into consideration before determining whether to enforce repayment, all information supplied in relation to the reason for non-payment, which may include The Common Financial Statement, or the debtor’s future ability to repay. If the debtor has disclosed multiple debt problems, inform them of the availability of advisory services”.

    A full list of subscribers to the code can be found on the CSA website.

    For more information view the CSA Code of Practice.

  • Q:What does the Individual Voluntary Arrangement (IVA) Protocol say about the CFS?


    The Insolvency Service deals with insolvency matters in England, Wales and some insolvency matters in Scotland. The IVA Protocol is a voluntary code to facilitate the efficient handling of straightforward consumer IVAs. Section 7.5 of the protocol states:

    “The expenditure statement should be forward-looking and in line with Consumer Credit Counselling Service (CCCS) guidelines or the Common Financial Statement (CFS). Generally, there should be no deviation from the expenditure guidelines. However, where additional expenditure is necessary, for example due to special dietary requirements or increased heating bills due to caring for elderly relatives or above average work-related travel costs, this should be clearly explained”.

    For more information please view the Insolvency Service IVA Protocol.

  • Q:What does the Money Advice Liaison Group (MALG) Mental Health Guidelines say about the CFS?


    MALG is a forum promoting better communication, best practice, understanding and professionalism amongst organisations concerned with consumer credit. This includes debt, money advice, debt collection and related matters.

    MALG’s voluntary Mental Health Guidelines outline what constitutes good practice in the treatment of individuals with debt and mental health problems. They also cover best practice in the management of debt when a consumer is already in financial difficulties. Section 14 of the guidelines states:

    “Advisers should, ideally, be encouraged to use the Money Advice Trust/British Bankers’ Association Common Financial Statement (CFS), or a statement format that conforms to the general principles of the CFS, when they prepare financial information in support of client repayment offers or other forms of negotiation”.

    For more information please view the MALG Mental Health Guidelines.