Credit Management November 2022

NEWS SPECIAL - EXCLUSIVE
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“We have known for a very long time that early engagement between customers
and those collecting the sums they owe is the best way to avoid problems
developing and for those customers to gain access to support and forbearance
where needed,” – Chris Leslie, Credit Services Association ..
reassuring message on how and where to
access help.
The findings echo those published by
the FCA in June of this year, which also
highlighted the need for firms to be swift to
respond to consumers in financial difficulty,
particularly in the light of the ongoing cost of
living crisis. Its Dear CEO letter to more than
3,500 lenders reminded them to provide tailored
support to struggling borrowers, including
effectively directing customers who need it to
money guidance or free debt advice.
In response to the report, StepChange
believes the Consumer Credit Act requirements
on creditor communications should be revised
to ensure content prescribed by legislation and
rules does not overwhelm people and lead them
to disengage.
StepChange Head of Policy Peter Tutton says
creditor communications need to be simplified:
“These findings are designed to help the advice
sector and creditor organisations decide how
best we can work together, and with regulators,
on practical steps that would deliver earlier
and better identification of financial difficulty
and vulnerability, improve the effectiveness
of communications and ultimately improve
outcomes for customers.
“By developing messaging that focuses
on helping people to resolve their situation,
empathetic communications that recognise the
emotional impact of financial difficulty, and the
presentation of a simple, clear plan of action,
creditors can ensure better outcomes for more
consumers. We hope the experiences outlined
in this report will inform further steps by
government, industry and regulators to improve
the effectiveness of creditor-consumer dialogue
and get people to the help they need earlier and
with less anxiety.”
Responding to the StepChange report, Credit
Services Association Chief Executive Chris
Leslie told Credit Management that it is in
everyone’s best interests – customers, creditors,
and collections agencies – to make dialogue
and discussion as easy and accessible as
possible: “We have known for a very long time
that early engagement between customers
and those collecting the sums they owe is the
best way to avoid problems developing and for
those customers to gain access to support and
forbearance where needed,” he explains.
“That the report highlights the arcane and
outdated regulatory barriers of the Consumer
Credit Act echoes calls for reform we at the CSA
have been making for some time, namely that
the Government must move forward with plans
to end the formulaic statutory notice mailings
which are clearly unnecessary and potentially
confusing for customers. The current legislative
framework is far too restrictive to enable truly
effective communication.
“But this is clearly only part of the wider issue
of driving earlier engagement with those in
financial difficulty and encountering challenges
coming from other sectors of the economy.
There is now widespread information and
signposting for customers towards free debt
advice but the ongoing lack of engagement is
still a significant challenge that all quarters,
including debt advice providers, will need to
address.”
Equifax partners with PrinSIX to enable
Telco’s to bolster social tariff outreach
EQUIFAX and PrinSix have facilitated an Open
Banking solution for KCOM, a Yorkshire-based
broadband provider, to create what it says is
the UK’s first internet service provider (ISP)
accepting applications for a social tariff online.
Social tariffs give eligible low-income
households the ability to access cheaper deals
from their service providers. Social tariffs were
applied to broadband and mobile bills in the
summer to tackle the rising cost of living.
Despite social tariffs being offered by Telco’s,
only two percent of those eligible for the
discount have applied. Due to the lack of uptake,
the Government is increasing pressure on
Telco’s to close the gap – but many are relying
on outdated systems that result in applications
taking up to four weeks to be approved.
Andy Sacre, Product Director of Open
Banking at Equifax UK, says using technology,
like Open Banking, to help more people access
this utility is the exact type of action Telco’s
should take today to combat the rising living
costs: “Our partnership with KCOM and PrinSIX
has replaced out-dated approaches with
intuitive and personalised application journeys,”
he explains.
“This reduced the application timeline for
social tariffs on broadband from four weeks to
four minutes an incredible jump in efficiency.
Ultimately, this means those in the greatest
need of additional financial help will get it
quicker.”
Andy Sacre –
Product Director of Open
Banking at Equifax UK.
Brave | Curious | Resilient / www.cicm.com / November 2022 / PAGE 7