Are you really treating arrears customers fairly?

The first point to make is that at whatever stage of the journey your customer has reached within your organisation, they must remain first and foremost a consumer who is provided with clear information and kept appropriately informed, to paraphrase the Financial Conduct Authority’s (FCA) Principle 6. It has always been important to treat customers fairly, but it is as important not to lose sight of the fact that they remain your customer through the lifecycle of the account. This is further supported by the FCA regulations on how to treat customers in arrears with their payments.

You know as collections professionals that treating customers fairly, aside from your regulatory duty, is good business practice. By providing clear and constant communications in a way that suits the consumer is the most effective way to engage a response and build a relationship that will improve payment performance and protect the reputation of your business. To do so, organisations need to thoroughly review communications across all channels to ensure that wording is appropriate, with no potentially threatening language and no misrepresentation of either the organisation’s intentions, or its legal position.

Another facet of appropriate information is avoiding the same communication being sent to all and sundry, it is expensive and may indeed lead to not treating customer fairly based on the generic message it brings. By differentiating your message/contact strategy to different sets of customers/accounts will ensure it is relevant and specific to their situation. Also, some collections techniques can be potentially threatening to customers. In today’s environment this now exposes organisations to regulatory risks and penalties. The goal is to understand your customers’ needs to ensure that your strategies take their interests into account, putting them at the heart of what you do.

An easy way to put customers at the centre of your operation is to allow them to manage their accounts online. You can do this by providing an online portal such as SmartCollect from Telrock, where they can make secure payments, set up direct debits and create payment plans on any device, including mobile phones and tablets, without any involvement from your team members.

Of course, seeking payment or promises of payment is at the heart of your collection’s communication and again, they must be appropriate and proportionate based on the customers financial circumstances. Ideally, this should include the ability to complete a Standard Financial Statement (SFS) that provides an affordable and sustainable offer of payment that meets with regulatory approval and at the same time is within the parameters that can be automatically accepted offline.

Having set a strategy, you need to have appropriate systems and controls in place to monitor whether the strategy is successful and whether customers’ needs are being met. This should include adequate record keeping and monitoring to ensure compliance, not only of your firm and its staff but also, where appropriate, third parties acting on your behalf. Optimus from Telrock is a modern Cloud based Collections solution that meets all todays needs for collections professionals.

The questions that you should ask yourself are:

• Is our written communication clear, concise, appropriate and applicable?
• Is my messaging targeted to meet the needs of the customer?
• Are the forms of contact I use avoiding potential unnecessary actions that could lead to a complaint?
• Are my customers allowed to self-cure through an online portal?
• Am I able to provide pre-set, self-calculating forms of income and expenditure that present the Standard Financial Statement in multiple forms of contact?
• Am I using multiple forms of contact such as website, email, SMS and phone and are they all recorded and measurable?
• Having established a promise to pay, can you automatically acknowledge when it is kept and otherwise, avoid unnecessary contact.
• Do I have sufficient systems in place to alert the customer of any regulatory requirement and at the same time stop my agent from taking any next step that could contravene an external or internal rule set?

The answer to these questions could be to review your current system capability to ensure it meets the needs of the 21st century consumer and the requirements of the 21st century regulator.

The new generation of Omni-Channel collection systems pursue digital channel interaction and engagement capabilities to expand their consumer communication options. Aside from enabling you to provide the answers to the questions posed above an Omni-Channel collection enabled system will include the ability to instantly process new information that can automatically trigger the appropriate next communication or action and systematically move the account to the appropriate subsequent step in the workflow.

The decline in the effectiveness of traditional communication channels (letters and telephony) has been replaced by the rising success of digital channel communications (SMS/text, email, chat and consumer self-serve collection portal). This enables businesses to inform their customers with clear information in real time and provides a measurable and auditable record of activity. By meeting the information needs of their customer, firms can ensure that they treat their customer fairly.

In addition, not having real-time processing within your collection system for omni-channel collections, means a payment made just now by a consumer via SMS/text will not trigger an immediate automated process to instantly inform the collector of the payment. Nor will it automatically pull the account from the collector’s queue, remove the account from a dialer campaign, or stop the demand letter from being sent.

The same can be said in the event a consumer establishes an agreed upon payment plan via a self-serve collection portal. Real time communication and update improves customer communication, promoting a desire to make the next payment due. It reduces cost and potential complaints, avoids regulatory attention and enhances your firm’s reputation.

The content, timing and method of delivery of the message is key. Being able to monitor, record and respond is essential.

Bruce Turnbull. Business Consultant, Telrock

Optimus and SmartCollect from Telrock is the answer, modern cloud-based Software as a Service for compliant omni-channel collections.

Call Telrock 07971 418914 or 0207 183 1573 to find out more.