Why do Irish banks prefer Stepchange model?

25 September 2015

Legal rights group FLAC today expressed puzzlement at news that five major retail banks in Ireland are to fund a UK debt advice agency to provide a telephone support service in Ireland, instead of offering that funding to the existing and well-established MABS (Money Advice & Budgeting Service) organisation.

“It is just curious that the banks feel it necessary to invite a UK debt restructuring agency to the field when MABS is already here as an independent, free, tried and tested service” said FLAC Director General Noeline Blackwell.

“We know that MABS supports people, often in the long-term, to repay their debt based on a realistic and holistic assessment of their overall debt and their living situation. We know that the MABS approach works for people in trouble with their debts. What was it about that model that the banks didn’t like?”

In an interview on RTE’s Morning Ireland today, Stepchange CEO Mike O’Connor spoke about the ‘healthy competition’ that his agency would introduce when they commence business in November 2015.  FLAC questions how such healthy competition will benefit the over-indebted person in need of support in their dealings with creditors.

A pilot project sponsored by the Central Bank was operated by Stepchange in 2013, when it appears MABS and smaller creditors declined to take part in the model proposed by the Bank and Stepchange.  “Opinion is divided on whether this pilot was a success or not. If it failed, why are the banks still pressing ahead with it? And if it worked, can we have information on all the parameters involved: What were the debts? How was it evaluated?  And why was it more suitable than the MABS model?

“These are very important questions that will have serious consequences for over-indebted people in Ireland – particularly given the sizeable sum of €6m being injected by the banks into this initiative,” commented Ms Blackwell.

 “Various supports for over-indebted people promised by government in May 2013 have yet to be brought into effect. While limited personal insolvency reforms passed through the Dáil before the summer, they are not yet implemented. People still do not have the legal and financial support that they need in dealing with lenders and no adequate systems have been put in place to convert mortgages to rented properties,” she concluded.



Editors’ notes:

  1. FLAC (Free Legal Advice Centres) is a human rights organisation which exists to promote equal access to justice for all. FLAC is an NGO that relies on a combination of statutory funding, contributions from the legal professions and donations from individuals and grant-making foundations to support its work.
  2. FLAC offers basic legal information through its telephone information line (1890 350 250) and free legal advice through a network of 80 volunteer evening advice centres – more at  It also campaigns on a range of issues including consumer credit, personal debt, fairness in social welfare law, public interest law and civil legal aid. FLAC has issued numerous analyses and policy statements calling for a fairer mortgage arrears resolution process.
  3. The Central Bank’s press release on the 2013 Stepchange ‘Multiple Debt Framework Pilot’, dated April 2014, is at
  4. Updates on FLAC’s policy work and comment on personal debt issues are at