This blog is based on the presentation that Annmarie O’Connor gave at the conference: The Banking Crisis a Decade On: Victim and Public Perspectives on Apologies in Ireland at the Royal Irish Academy on Thursday 27 September 2018.

It has been quite a decade for the Money Advice and Budgeting Service (MABS) and its clients.  Since 2008, MABS has provided a service to nearly a quarter of a million households.  The stats show a bell-shaped curve with demand rising rapidly from 2008 then reaching a peak between 2010 and 2013 at roughly 27,000 clients per annum, before levelling off to about 20,000 a year in the years since.  Similar numbers called our MABS Helpline each year and we are currently referring about a third of all callers for face-to face support in one of 65 MABS offices nationwide.

I am not an economist, a lawyer, a regulator, a policy maker, a journalist or an academic.  In MABS we do money management and debt advice.  My experience and observations are wholly limited to what I see in MABS casework.  I don’t work on the frontline but I’m not too far behind it, in the background as a support to money advisers with advanced casework, in the development of protocols, negotiating with creditors, providing the MABS helpline, its casework systems, education supports, learning and development, social policy and communications and so on.

I was there at the beginning; I was there during the middle, and the end?  Well we’ll all have to see.  We are making a lot of progress, especially over the last 3 years, I hope, but I can’t be sure, that we are now at the beginning of the end.  I sincerely hope we are.

Based on 10 years of working on personal debt and nothing else, I suppose it might be OK to share some remarks today about what I’ve learnt.

I had to think about accepting the invitation from Muiris, because there is a lot of emotion tied up in the work, which is hard to hide when you speak.   There is a risk, that when you talk with empathy about over-indebted borrowers that you will be seen, by some, as a ‘bleeding heart’, a soft touch, a bit naïve, or downright gullible.   In my experience, it’s possible to take an entirely rational approach to casework, to do the sums and follow the money advice process objectively and systematically, and to also be affected and moved by what you see.  Personally, I see that as strength of a profession and not a weakness.

The points I make today are, more or less, the same ones I’ve been making in dealing with banks and financial institutions and other creditors and stakeholders over the last 10 years.

Relationships matter.  Trust matters.


The first point I’d like to make is about perspective.  Over the last decade, just about everyone in MABS has spoken to a caller or a client who has expressed some form of suicidal thought or concern.  I can’t give numbers but I do believe that lives have been lost where concern about debt was a major contributing factor.

Against this backdrop, and fully realising the severe consequences that households unable to pay their debts often face, our priority in MABS is always the mental and physical well-being of our clients.  First and foremost.

Reflections – a trickle that became a flood

In preparing for today, I looked back at what I was doing 10 years ago.    I remember going to a training event shortly after I joined MABS in early 2008.   In retrospect, perhaps there were signs.

We were in a now long-gone venue off O’Connell Street.  It was a cold and wet day and the roof was leaking.  Paul Joyce of FLAC was providing training about problems with sub-prime mortgages, and at the tea break, in politely welcoming me to MABS, advisers were saying ‘yes’, there was a problem with sub-prime, but there might be bigger problems coming.

Shortly afterwards, roughly March 2008, an email from one of our Dublin offices called out for help from other offices.  There had been a constant stream of clients coming through the doors over the past four months with utility bills and threatened disconnections.  At first, she said, she thought it was ‘seasonal’ but now, she wrote, ‘there is no end in sight’.

Waiting lists for appointments started to build, we had more mortgaged clients, more facing utility disconnections, problems with personal loans, credit union debts, HP, credit cards, private and local authority rent arrears, catalogues, medical bills, court-fines.

While we had a growth in the number of mortgaged clients, there was a bit of a lag before mortgage arrears really became a core component of MABS casework.  In our experience borrowers prioritise their mortgage and so it was the ‘other debts’ that became problematic first.

Perhaps hoping that their financial difficulties would be short-lived, many tried other strategies to protect the family home first, including debt consolidation, use of credit cards, other borrowings and using redundancy payments.  Early on, Mortgage Interest Supplement (MIS) was a vital support for those who were eligible.    So it was really from 2010 on, when we felt the mortgage problem most acutely.  Self-employed people seemed to experience difficulties first, because if they weren’t getting paid, they themselves couldn’t pay their debts and they had little by way of State supports to fall back-on.

Research carried out by Waterford MABS in 2011 and by colleagues in MABS National Development in 2013 back-up my reflections of that time.

We weren’t meeting strategic defaulters; we were meeting people who were doing their best to meet their commitments but sinking faster into problem debt.  Our research shows that many felt personal responsibility; some felt they had been poorly advised, (particularly by brokers), and others felt that they were not adequately educated about the risks they faced when they took out their loans.  Some were stuck with very high sub-prime interest rates.

Some wanted to get out early.  The house was no longer a home, it was a ‘millstone’, but there was no way of getting rid of residual debt after a voluntary sale or surrender.  Also, in the early years, if you surrendered the property you could have been deemed to have made yourself ‘voluntarily homeless’ and face difficulties in accessing social housing.    Early on, a lot of people delayed taking decisive action perhaps because they believed that new regimes for personal insolvency and debt resolution were forthcoming, as proposed in the Law Reform Commission’s report on Personal Debt Management and Debt Enforcement (2010) and included in the Programme for Government of the Fine Gael/Labour coalition (2011).

I know the term ‘irrational exuberance’ has been used to explain our boom and bust, but looking back at our cases, I would say there was an equal measure of ‘rational pessimism’. Amongst our clients there have been many who felt that if didn’t purchase a home they risked being priced out of the market for good.

When I reflect some 10 years on, that leaking roof in the room of O’Connell Street had been the portent for what would soon become a flood.


I met Muiris in the summer on the ‘apologies research’ and I left the interview feeling unsettled.   ‘Was there abuse? Were there victims? Who could determine that? Would an apology help?  If apologies are going to be given – who should or could give them?’

Whatever of the evidence we may see in casework, in Ireland, we see no evidence to date of success in making a defence based on a civil wrong of reckless lending.  Where would you locate accountability? Because the Irish Credit Bureau was not fully comprehensive, lenders may have only had a partial insight into the extent to which borrowers were over-extended.  Brokers seem to have been instrumental in the ‘credit bonanza’.  Additionally, the sub-primes, (GE Money, NUA, Stepstone, Start Mortgages, Springboard) stopped lending, and their loan books have been sold or are ‘under management’ by credit servicing firms.  Anglo and Irish Nationwide were liquidated; BoSI, Danske and Rabo have all exited the Irish market and currently the non-performing loans of several of the main banks are in the process of being sold.

Thinking more about the subject matter of Muiris’s research ‘Apologies’, and in no way meaning to denigrate the importance of this research, which I believe is both necessary and important.  I am minded of my 5-year-old daughter’s response to her brother after a particularly brutal row.  ‘Sorry is just a word Ely; it doesn’t actually make anything better’.

Making things better

Making things better, or at least more manageable, is the role MABS has played over the last 10 years.  Inevitably MABS staff acts as ‘lightning rods’ for emotions that need an outlet and that process is ongoing.   My office door opens onto the MABS Helpline and when the loan sales to funds happened during the summer, I could hear our advisers dealing with calls from borrowers both distressed and angry about what was happening.    Over and again, I could hear advisers say ‘I understand that you are angry, I understand that you are upset’, and sometimes, too ‘I’m sorry that you feel like that’.

Our approach

Often when people talk about MABS, they will talk about the kindness of staff and their ethic of care which is very good to hear, but sometimes that focus can detract from the other strengths of the service provided, the professionalism, the structured approach and a certain doggedness about the value and integrity of process, and of ensuring that we advocate strongly for borrowers whose legitimate rights as consumers may have suffered through their engagement with financial services providers and others.

We, in MABS, tend to be pedantic about such things as reviewing original contracts and related documentation, using regulatory Codes as an integral part of casework and exhausting relevant appeals mechanisms.

We try to use plain language in our own documents and in our interactions with clients.  We won’t over-promise or say that we will deliver a particular outcome in a particular case, we set out pros and cons of various options very clearly and we aim to empower our clients both to take control of their decision-making and their case.  The goal, whatever the outcome, is to try and build financial self-reliance and re-build capability.  It’s not just the debts that wear people down, it’s the feeling that there are constant ‘micro-aggressions’ or ‘micro-transgressions’ within the process of getting an agreement that can build to a point where they just give-up.

In short, we will never intentionally replicate any of the weaknesses we have perceived in the wider financial services sector.  Our clients often have not been served well in their consumption of financial products.  In this sense then, MABS plays a role in a restorative process between borrowers and banks and other creditors.  We aim to show clients that while they have responsibilities in respect to their borrowings, they also have important rights that must be upheld by their financial services providers. .

Rebuilding trust

What I am more aware of though, since that discussion with Muiris, is the vital role that MABS has in brokering between borrowers and financial institutions.

‘Credit crunch’ – tracing back to the Latin origins of the words, literally means ‘broken trust’. I think Simon had a September 2007 article, about the ‘run’ on Northern Rock that makes the same link; ‘credo’ – ‘I believe’…’I trust’.   Credit, like trust, is, in my view, a kind of essential social lubricant that reduces friction and lets us get things done.  Too little of either credit or trust gives us friction and ultimately stagnation, too much …well, we have seen what happens when we are too trusting.

In MABS we have always played the role of ‘honest broker’.  We are in the middle between borrowers and banks; rebuilding trust and thus reducing friction when relationships have broken down.

Strategic Default

I don’t like the term strategic default.  It implies a deliberate and meditated gaming of the system that I just don’t see.  There is some research (Connor and Flavin 2015 and O’Malley 2018) and lots of speculation about the extent of strategic default in the Irish mortgage arrears crisis.  Some researchers have noted that it is difficult to quantify strategic default using large data sets.  It is claimed that, ‘strategic defaulters… disguise themselves as people who cannot afford to pay’. 

We in MABS, have the benefit of having the relevant information, we can see the loss of income on payslips, or social welfare statements and the consequent impact on a household’s budget and its expenditure on bank statements. What we don’t often see in MABS (and, if you think about it, why would we?), are people who can afford to pay their debts but won’t.   On the contrary, we see people who wish to pay but too often just can’t.

Dealing with one thing at a time – ‘non-engagement’

Another phenomenon observed in the Irish mortgage arrears crisis is that of ‘non-engagement’.  I believe, (and our own limited research carried out in 2011 and 2013, backs this up), that there is an important causal link between mental illness, depression, relationship and family breakdown and chronic physical illness in the persistency of our personal debt problems.

All those issues can lead to, or arise from, a loss of income, but can also serve as a block to addressing an arrears difficulty.   In my experience most people have only enough personal resilience to deal with one life-changing event at a time and sometimes are just not able to engage with their debts while dealing with another personal crisis.   I’ve seen cases where one borrower has hidden the arrears from a partner because they were too afraid of the hurt or harm it could cause to a loved-one already coping with a recent cancer diagnosis or severe post-natal depression.

I’ve also heard of cases where borrowers were poorly advised and where respected third-parties said ‘don’t pay’ either because blanket debt forgiveness was on its way, or because the loss of the home was inevitable, and the borrower would be better-off paying nothing in preparation for the day they’d lose it.

While we hear a lot about both the strategic defaulters and the non-engagers there’s much less said about the people who are engaging to repay their debts.

Living with problem debt

So I’d like to take the opportunity to say something about our experiences of borrowers who are working to resolve their arrears and why we in MABS are there to support them.

Many of our clients are hoping that things will improve and are actively working to make that happen and for some, thankfully, it is happening.

Getting payments back to a level where the bank/loan owner will put in place an arrangement can involve many sacrifices.  It can involve putting your life on hold, not thinking about, or being able to plan for old age, it might involve taking in lodgers in your older years, cutting out holidays and a social life.  It involves applying for any available State supports to increase income.  Many are double-jobbing and juggling shift patterns or relying on grandparents to avoid paying for child-care.  For most, it involves a regime of watching every last cent that comes in and goes out.   It involves, making a budget, cutting it, and cutting it again.

For those in late-stage mortgage arrears, it may involve having to go to Court, and having neighbours, friends, family and colleagues know that your home is at risk of repossession.  Being over-indebted can limit access to credit and may mean that when something goes wrong you won’t have cash to see it right.

Before coming to us, some of our clients may have put off seeing the doctor or the dentist and are just living through the pain.  Others may have forgone educational opportunities, sold a car or other small items of value; a laptop, a bike, a ring.  Some might decide not to have another child or perhaps not have children at all.

In order to come to an alternative repayment arrangement (ARA), you have to write down what you earn and what you spend and provide back-up documentation to support it and give that to your creditors.

You must tell the story of ‘how you got here’ to strangers; sometimes over and again.   That ‘story’ often involves losing a job, having a serious illness, a relationship breakdown, bereavement, a failed business.  It will nearly always involve some ongoing vulnerability in relation to certain basic expectations (a job, a family, and a home) as well as an ongoing anxiety about the overall direction of your life.

Depending on the lender/loan owner and their ‘suite of options’, a temporary restructuring arrangement is a possibility and, in the case of mortgage debt, if you can stick with it for 12 months you will likely get a long-term arrangement but, it will be reviewed periodically and, things can change.

Most borrowers have to wait patiently for their lender’s internal wheels to turn before they get an arrangement.  Borrowers can and should, explore other options such as insolvency or Mortgage to Rent (but both timing and decision–making by banks have a bearing on this).  Sometimes our clients won’t get an arrangement and they won’t necessarily ever get to know why.  Other than that they have been deemed ‘unsustainable’.  Those with strength, stamina and support can appeal their lender’s decision and keep going.

But be in no doubt, if you have problem debt and in particular, mortgage arrears, your lender is in your life.


Roughly this time 10 years ago we began working on an Operational Protocol with the Irish Banking Federation (now BPFI).  I remember early meetings where a number of the member institutions seemed reluctant to fully engage.  There was a lot of talk about ‘delinquent borrowers’ but as the months went by, attitudes changed and it became obvious that both we in MABS and the participating banks needed a standard process for joint engagement with borrowers in arrears.

As we progressed into 2009, there was no more talk of ‘delinquent borrowers’ and everyone realised that problem over-indebtedness was a mainstream issue.  It could happen to you, or me, our parents, our siblings, our friends.

The aim in working with banks at that time was to put in place, ‘mutually acceptable, realistic, affordable and sustainable’ solutions for over-indebted borrowers.  We agreed to work within defined timeframes, to use a Standard Financial Statement (SFS) and participating institutions agreed to halt legal action for the period during which MABS and borrowers were working to put in place an arrangement.    If I look back, that first protocol between MABS and BPFI members was absolutely critical to our work over those very difficult early years of recession.

Remember; this came before the Code of Conduct on Mortgage Arrears, before the emergence in the Irish market of commercial debt management services and before we had a regime for personal insolvency.  In MABS we went on to successfully apply those principles in our dealings with all creditors.

I can honestly say the work we did with banks and major utilities on that first protocol, both at one-to-one level, and through various representative fora, was amongst the most effective parts of the work we have done in the past 10 years.  In 2015, we developed a further protocol providing defined timelines for write-down or write-off of unsecured debts for eligible borrowers.  The approach was not one of parallel governance; there is a welcome acceptance now within key processes such as the Mortgage Arrears Resolution Process (MARP), that repayment plans must be sustainable.  That borrowers need to be able to pay for more than just the essentials of light, heat, food, for themselves and their children and so on, but also to have some money for ‘social inclusion’ in order to sustain an alternative repayment arrangement.

It really helps that MABS is named in relevant Codes such as the Code of Conduct on Mortgage Arrears and the Consumer Protection Code and in the CER’s Utilities Suppliers’ handbook.

It helped that we knew that the most senior executives in (at least some of) the main credit institutions were aware of MABS and supportive of what we were doing with, and for, their customers.

It helped when some of the institutions asked us to train their front-line staff.  It helped when we sat around the table together to discuss cases and it helped that we had escalation contacts to call on in the most intractable cases.  All of this work was about building and re-building trust between ourselves and creditors and between our clients and their creditors.  It would be wrong to give the impression though, that creditors work with MABS as some benign expression of their corporate social responsibility.  They do it, because (to use a now almost iconic banking term) they have ‘skin in the game’.

Continued role for MABS

Ten years on, we’ve begun to talk to creditors, via the BPFI, about reviewing and renewing our 2015 protocol.  The objective would be to enable more borrowers to achieve a lasting resolution to their debts within a defined period.   My primary current concern however, is that the landscape in which MABS operates is fragmenting (I’ve already referred to all those who have exited the market) and that the essential role we play in brokering between borrowers and banks and other creditors could be lost.   The greatest manifestation of this is the sale of non-performing loans (NPL’s) to funds managed by credit servicing firms.  I have read the ECB guidelines on NPL’s and I understand what is happening from the regulatory and banking points of view, but I need to see a constructive operational role for MABS within this changed landscape.

A 2011 report by the ESRI on Financial Exclusion and Over-indebtedness in Irish Households notes that at that time, ‘The principle policy initiative on over-indebtedness was the setting up of the Money Advice and Budgeting Service (MABS) in 1992.  In MABS almost from the outset, we knew that what we did was not enough.  We knew that debt forgiveness is essential – people need to move on.  We have so much more than we had this time 10 years ago.  We have the Code of Conduct on Mortgage Arrears, we have the personal insolvency regime, we have Dedicated Mortgage Arrears Advisers in MABS, and we have the Abhaile Programme.  We have a new Credit Register.

When I look at MABS national statistics and talk to advisers about their casework, I know much more remains to be done.  Our target group has aged.  10 years ago, the majority (52%) were aged 26 to 40; now the majority of new clients (58%) is aged 40 to 65, and the number aged 65 and over, while remaining a small percentage, is growing.

Ten years ago, we were working with a client group that was primarily reliant on social welfare, with just over a third waged or self-employed.  Now, almost half of our clients are waged or self-employed.   This changing demographic is proof of our efforts, especially in recent years, to reach-out to more borrowers in late stage mortgage arrears, but it also shows that there is much remaining to be done and time is very much of the essence.  Lasting resolutions are needed.

A ten year anniversary is of course a time for reflection but I’m also thinking about the future.

I’ll leave you with a few thoughts:

I see our role as ‘honest broker’ as having become more difficult and also more necessary as the years have passed.  There was the banking collapse, the ‘tracker review’; last week an issue with the calculation of interest rates on top-up loans, this week an issue with the calculation of arrears by some loan owners.  The sale of loan books to entities we know too little about is ongoing.   It’s harder to build trust against this back-drop and consequently, what economists would call ‘transaction costs,’ are rising.

Even though we are still dealing with the over-hang of legacy debt, the wider world has moved on; relationships between financial institutions and their customers have changed.  Tech giants have moved into payments and behemoth challengers like Tencent and Square are emerging.  These developments are not without huge risks but they will democratise financial services and give us all more choices.  Whether banks as we know them survive is really about how they treat their customers.

In my role I’ve become watchful for ‘canaries’…

My 11 year old firmly refuses to put his small savings into any bank or financial institution.  Like many, his age, he grew up in the shadow of the banking collapse and, even if he wasn’t fully listening, the kitchen and car radios, had predominantly bad news about both banks and borrowers.   Instead he buys ‘v-bucks’ and saves them for ‘new skins’ and ‘battle passes’.  For the moment, like millions of children like him, he puts both his trust and his money into ‘EPIC’ games.

The world moves on.

I will leave it to Muiris and his colleagues to examine further whether apologies are needed, who should give them or whether, at this point in time, they would have any real value either for borrowers or for banks.

Views expressed in this speech are those of the author alone and do not represent the official views of ‘MABS’.