Do the right thing, Adviser's and creditors experience of best practice ...

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Step 5Provident Personal Credit is thelargest provider of home credit in the UK.Company agents call on customers at theirhome to issue loans and collect weeklypayments. In the past when advisers hadbeen instructed by Provident customers toact on their behalf, they found it difficult towork with staff in Provident’s local offices.For advisers, challenges could also arise ifan agent continued to call at a customer’shome while they were trying to or had setup a revised repayment plan for that client.Provident told us:Following discussions with the advicesector in which this issue was highlighted,we realised that we needed to review theprocess of how we dealt with a customerwho had instructed a free adviser to act forthem and to find a way to take customers’and advisers’ viewpoints intoconsideration alongside our own needs.We decided to bring these accounts intoa central department where it would bemuch easier to build on existing staffexpertise and knowledge. This changeenabled us to improve all aspects ofrelations with advisers and customersin difficulty.”
Information should be gatheredfrom a range of sources and usedto understand customers andtheir advisers, as well ascreditors’ own performance In theory, a collection strategy mightappear to achieve best practice andhelp people in debt regain controlof their finances. But in practice theremay be unintended consequencesthat have a detrimental impact onpeople in debt. For example,creditors might believe they aredoing the right thing by tellingsomeone that they will find it hardto obtain credit in the future if theycannot repay what they owe withina set time frame. But in practice,people in debt read this as ‘paymore or we will blacklist you’ andfeel pressured to pay more thanthey can afford. Unintendedproblems like this can be identifiedand addressed if creditors gatherfeedback and use it effectively. Inparticular creditors should use: Behavioural data and managementinformationCreditors can help people avoid the worst effects ofunmanageable personal debt by intervening early.Creditors can identify people who face financialdifficulties by monitoring income, payment historyand spending habits. For example, credit cardproviders could intervene early if a person startsusing their credit card to pay for council tax or othereveryday essentials. Other creditors could interveneas soon as payments are missed, in full or in part.Creditors should also use managementinformation about debt repayment to understandif their collections practice is working as expected.For example, if a large percentage of repaymentsfail, creditors should find out why and adjust theircollections practice accordingly – say by ensuringthey are using up to date CFS trigger figures toassess offers of repayment. If deductions fromearnings orders or attachment of earnings ordersare being used, repayments are less likely to fail.Creditors who use these collections methods –such as the Child Support Agency and localauthority council tax departments – shouldalso gather information from other sources,such as complaints and feedback from advisersand people in debt. 21
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