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The challenges of BAR

Apr 05, 2020
The British Association of Removers (BAR), represents the professional moving industry in the UK. As such it has its challenges and is often the subject of criticism. Steve Jordan talked to Ian Studd, BAR Director General, to explore some of these and the approach the Association takes to ensure that it meets the expectations of its members and their customers.

The Challenges of BAR

Ian Studd (pictured above) has been director general of
BAR since July 2015.  Changing an organisation that has been around for well over 100 years was never going to be quick.  But BAR has changed during his stewardship, and the process continues.

Financial strength

A primary requirement of any association is to police its membership to ensure that standards of service, business integrity and financial strength are maintained.  To this aim BAR introduced annual inspections some years ago to monitor the business practices of its members.  But maintaining a financial watch is more difficult and yet is of increasing importance as margins continue to be squeezed and the market changes.

I asked Ian what BAR was doing to protect customers and the reputation of the industry. He explained that the Association has always required financial checks on companies when they join.  But, until recently, did not monitor companies on an ongoing basis other than those members of the BAR Overseas Group that had an independently run finance protection scheme in operation.

“This all changed when we started the APG (Advance Payment Guarantee),” he said.  The APG, which started in 2017, is administered by a trust and provides a safety net for customers of BAR members should their moving company stop trading after they have booked and paid for their move. “It became necessary to have a more real-time handle on what was happening.”

But this had its difficulties, especially in terms of what is reasonable and affordable.  After all, the Association is merely the custodian of its members’ cash and needs to be seen to be spending it wisely. “So, from last year, we have implemented a benchmark credit ratio, through Experian, which we expect all our members to achieve.  If there is a fluctuation, we get a real-time flag that the rating has dropped. We then immediately contact the company and ask what has caused the fluctuation. This means we're in a better position to offset some of the risks before they happen.”

Ian Studd Ian said that problems are often very transient, but where there is a real cause for concern a company can be suspended or terminated from membership or be required to provide a personal or parent company guarantee to indemnify the APG.”

Another recent change is that suspension now means that a company has its membership terminated, pending appeal.  In the past companies were still considered to be members until they were formally expelled from the Association.  On suspension BAR immediately posts a notice on its website to alert the public.

The APG scheme is an innovative approach to a serious problem and could, reasonably, have expected to have had a little time to settle in.  BAR certainly did not expect it to have four calls on its services within the first 18 months of its existence.  But it did.  Richard Neave was the first and involved reimbursing 32 customers.  Fortunately, the sale of the company’s assets enabled the scheme to be reimbursed.  Shepherds, a small domestic company, followed and did not drain the coffers significantly.  But the big one last year was Pearsons, for which the APG paid out in full.  “It was this case in particular that made us think more carefully about having a real-time way of monitoring our members’ finances,” said Ian. “I am sure we are in a much better position now to spot if a company is getting into difficulties than we have been in the past.”  Many members would argue that everyone in the business knew that Pearsons was in trouble, so why not BAR?  Of course, any historic financial information is already many months out of date and an association must have a better reason to expel a member than hearsay. 

The Pearsons case also caused some angst with members who had provided trade services to the company.  Trade debts are not covered by the scheme.  “We came in for some criticism about this,” explained Ian, “but the BAR cannot be held responsible for the credit control of its members.” True, of course, but service providers would consider that BAR membership suggested financial stability and reliability, so you can understand some people getting grumpy about it.  But it’s not easy.  Expel a member too early and BAR could easily stifle its ability to trade out of trouble and protect its customers and creditors. Ian must also consider the exposure risk in each case, which can be very different depending on the business profile of the company.

Of course, on the heels of Pearsons came MoveCorp. A company that stopped trading then started up again immediately under a similar name.  Again, the APG came to the rescue of customers.  This happened after the new credit benchmark was imposed.  “When I checked the credit rating for the company it was above the required level,” said Ian.  Just shows, nothing is fool proof. 

These four calls on the resources of the APG have resulted in 485 customers being helped to get their moves completed. “It’s been enormously successful,” said Ian. “Where else could they have gone other than the BAR?”  He was also careful to point out that it is not BAR’s money; the Association is just the agent of collection. “Some people think that it's just a stealth tax to get more money into BAR’s coffers.  But it goes directly into the trustee account that requires all the trustees to decide whether there is a claim they can honour and agree unanimously to release it.”

Arbitration service

I also asked about the BAR’s arbitration service. Some companies feel hard done by because they have had to pay an administration fee to The Furniture Ombudsman (TFO) even if they have done nothing wrong. 

“Under the Consumer Regulations Act 2015 the consumer has to have free access to independent consumer resolutions,” Ian explained.” We pay a membership fee to TFO for those services. The money comes from members’ subscriptions and ensures that they are fulfilling their duty of care to the consumer. If a case is referred to the ombudsman, it automatically triggers an administration fee of £225. In BAR’s opinion it's right that the fee is picked up by the company involved, irrespective of the outcome.”

Ian said that most members learn from the experience because complaints of this type usually are the result of poor communication and additional costs.  “Some think we should deal with these disputes ourselves, but we can’t.  We can talk to customers, but the ombudsman has to be independent, and we are not.”  In 2019 there were 288,000 reported transactions by BAR members and just 184 referrals to the ombudsman, with 88 being found in favour of the member.  “So, if the BAR paid for the 88 [almost £20,000], how can that be fair to the rest of the members that were not involved? The scheme is a powerful sales tool that should outweigh the cost.  Members generally support it.”

Training

A key element of BAR’s service to members is training.  Altho

ugh 2019 was a tough year for the industry in the UK, BAR saw its training output increase by 37%. “Three years ago we trained 300 people, last year we had almost 1000 through the regional training centres and BAR,” he said. “We are adding new content all the time and we now have a framework for the Supply Chain Operative Apprenticeship programme for porters. This provides funding for employers and a clear career path in the industry right from school leaver.”

The moving industry has always been one that people stumble upon by accident.  This new scheme will, for the first time, make it a legitimate career choice for many capable and talented people. BAR is currently working on marketing materials to provide information in classrooms and to careers advisers in schools.

The industry is changing, and BAR is changing with it.  Ian Studd would be the first to admit that there is work yet to be done. But, contrary to some opinion, it seems BAR does listen to its members and is developing ser

vices to make their lives easier and their businesses better. It’s work in progress.

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