COMMENT
Changes in fi nancial protection
within the glazing industry
Certass chair, Jon Vanstone, discusses the issue of deposit protection during the
COVID- crisis and issues some advice to installers, including how to protect against
‘rogue consumers’.
Following news of a glazing industry fund
closing to new deposit registrations during
the COVID- crisis, I wanted to bring
some clarity for installers who suddenly fi nd
themselves outside the rules of the competency
schemes through no fault of their own.
For any installer who has registered work through
a competency scheme, the need to give fi nancial
protection and indemnify a deposit is an add-on to
every job that we are all used to. The value of this
has always been useful to consumers as they have
received defect cover of an installation for years
even if the installer is no longer trading.
The cost of such cover has been dependent on
the cover offered but is often around £‚ per job
notifi ed for most standard installation jobs involving
windows and doors. The driver for this regulation
surrounding the schemes was to protect the
housing stock in the UK from defects especially for
non-compliance with the building regulations.
DEPOSIT PROTECTION
The need for insurance cover has been around since
day one of competency schemes with the general
rule by glazing schemes being that you must also
provide deposit protection. However, this additional
element concerning deposit cover is more of a best
practice position and is not imposed by the rules
governing competent person schemes.
The largest installers in the market were party to
a collective fund and it was deemed appropriate
historically that this be made the case for all others.
This gave a pricing advantage regarding IBGs for the
larger installer members of the collective fund.
The extremely swift withdrawal of one fund has
shifted the position for installing businesses who
paid into this as they have now lost an advantage
they marketed, arguably at the most vital of times
to consumers. Although, given the amount of
deposits taken by national businesses, it is possible
to imagine that the collapse of any major participant
could bankrupt the fund pot and put all fund
participants at considerable fi nancial risk.
Such models are only effective if they perform
at times of greatest pressure. To only operate when
the going is good fi nancially, offers a false sense of
security for industry and consumers alike.
May www.ggpmag.com
"So, we are left in a position that is not ideal, with deposits
needing to be taken and best practice being that they are
covered. The easiest method is to ensure the consumers
pay on credit card as the banking system then assumes
protection, whilst industry and government works out where
we go in 2021"
Indeed, rapid withdrawal of such a fund means
that participants are immediately placed outside
the rules of the competency schemes as deposits
are unexpectedly unprotected. Suddenly, local
tradesmen were abiding by rules that the large
installers were no longer meeting.
The rules surrounding this protection are in
review and will amend in early ‚‚, however the
current position as explained by government is that
it is up to the schemes.
With the loss of such a fund I understand that
other insurers reassessed the fi nancial viability of
covering deposits and suddenly installers were
placed in the risky position of not being able to
meet certifi cation body requirements.
Certass has responded by removing deposit
cover requirements, as it is unfair to expect installers
to abide by a rule that could be impossible to meet,
and reduces double standards between local and
national businesses.
New mechanisms need to be created for the
future and the usual position may be adopted
where industry looks for government to make rules
that they believe our industry should be leading
with. Throughout the COVID- pandemic, we
have seen associations reposting government
updates without any thought, interpretation or
common sense applied, which serves nobody.
Government expects more from trade associations
and that is why at Certass we have been delivering
information relevant to our membership with
absolute clarity, giving them the confi dence to make
the right decisions for their businesses.
Some suggest that no deposits should be taken,
as supported by some consumer groups. However,
at Certass we have been able to demonstrate to
some of these infl uencers that businesses need the
ability to charge deposits to cover materials. The
reverse argument is that we are using such deposits
as cashfl ow and consumers could be left in diffi cult
positions, but this argument can be countered by
the ‘rogue consumer’ whose actions can destroy a
local business without any easy recourse.
So, we are left in a position that is not ideal, with
deposits needing to be taken and best practice
being that they are covered. The easiest method is
to ensure the consumers pay on credit card as the
banking system then assumes protection, whilst
industry and government works out where we go
in ‚‚.
For those in Certass, I would suggest using the
contract templates available, produced in ‚
and updated in ‚‚. These will protect installers
against consumers trying to withhold large sums of
money for minor issues and are updated to account
for guidance since COVID-.
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