Developing A Debt Collection Customer Vulnerability Strategy

The FCA Finalised Guidance For Firm On The Fair Treatment of Vulnerable Customers identifies three areas which are essential for firms to consider when building a vulnerable strategy as outlined in the below diagram.

For businesses which are just starting to develop their debt collection customer vulnerability strategy, we have broken these down further in to 7 steps a business should take to ensure that vulnerable customers are identified and then effectively supported through the debt collection process. These are by no means exhaustive but should provide a framework to help your business move to a customer centric model which ensures fair outcomes for all customers.

Step 1: Establish Vulnerable Customer Policy

It is important to have a written policy which outlines your businesses approach to customer vulnerability. If you want your staff to take it seriously, then so must you as a business. Everyone needs to be clear what good looks like, what is not acceptable and to be held accountable when they fall short. Your policy should:

• Set your policy objective
• Define what constitutes a vulnerable customer.
• Set out how customers will achieve a fair outcome.
• Outline the measures that will ensure adherence to the Vulnerable Customer Policy across all levels of the business.

Step 2: Build Staff Training Process

For any policy to work it is critical that staff understand and have empathy for those in vulnerable circumstances. At Barratt Smith Brown, all new staff, whether they are customer facing or not, take part in small group workshops in which we discuss:

• How their role and actions affect the fair treatment of vulnerable customers
• The types and characteristics of vulnerability which might affect our consumers
• The impact a consumer’s vulnerability could have on their customer experience / outcome.
• How they can identify vulnerability
• Some of the steps they can take to ensure different customers with different vulnerabilities achieve fair outcomes.

The information covered in these workshops should be always accessible to all employees so they can use it to inform their decisions when dealing with potentially vulnerable customers to ensure they achieve the best outcome possible. This could be via their employee handbook or intranet system.

Step 3: Adapt Communication Strategies

Communication is a critical factor in supporting debt collection customer vulnerability.  As many forms of vulnerability may affect a customer’s ability level of understanding, ability to retain information or make informed decisions.  In order to ensure consumers really understand the options available to them and the consequences of their decisions within the debt collection process, it is critical to ensure you deliver your customers:

• Easy to understand jargon free communication
  • All communication with customers should be as clear as possible leaving nothing open to interpretation. This should be in all communication whether written or verbal.
• Access to information
  • Consumers should have easy access to information to help them understand, and therefore make the best decisions, about their debt position. This can be done through a consumer help and support section on your website which provides consumers with information regarding the debt collection process, links to organisations who can provide debt support as well as some FAQ’s or through sharing other third-party websites.
• An omnichannel approach
  • It is critical to enable people to communicate with you in the mode they feel most comfortable. A key part of that remains the phone – which is still preferred method for most and particularly for those who may be older or have low literacy, trust or disabilities.
• Flexibility to use third party representation
  • Customers who are vulnerable may ask for a third-party representative to act on their behalf, to both notify you of vulnerable circumstances or to act as an intermediary if disabilities provide a barrier to understanding.
• Alternative communication methods
  • These could include Braille or Large Print and should also be accommodated where possible to remove access barriers.

Step 4: Establish A Vulnerable Customer’s Action Plan

Once a customer has been identified as being potentially vulnerable there needs to be an agreed process or action plan which outlines the next steps that will be taken to ensure they achieve a fair outcome.  Established within the process should be:

1. How to record identified vulnerability.

Once a customer is identified as vulnerable, this should be highlighted on their customer record. This will ensure that all future contact from your business can be adjusted to meet the identified needs of the consumer.

If a non-customer facing colleague, who doesn’t have access to the appropriate systems identifies a potential vulnerable customer, there should be an established procedure outlining whom they report their concerns to ensure appropriate records are updated.

2. The recommendation for additional support required.

Once a vulnerability has been identified and recorded, by either working together with the customer to agree the support they require, using strategies your business has identified as having the potential to support customers in similar circumstances or through the agent’s initiative and common sense, the steps required to ensure the customer will achieve a fair outcome should be highlighted on their record. For example, if it has been identified that the customer has low level literacy and therefore all future communication should be handled over the phone – this should be clearly marked on their customer record to avoid the inconvenience and embarrassment of further written correspondence. Or if all correspondence is to be copied to a carer or support worker – this should also be noted and actioned.

3. Next steps necessary to ensure delivery of outcome

It is very easy for someone who is vulnerable and who is balancing competing priorities to forget to follow up and to potentially drop off the radar. Once a customer has been identified as vulnerable it is critical to realise that standard timelines might not apply, and that following to conclusion will probably take more effort than usual. This again should be highlighted on their customer record to ensure any future correspondence takes this into consideration. Any reminders should be sympathetic not aggressive.

4. How customers will be reviewed

Customers who have been identified as vulnerable should be offered regular reviews at intervals appropriate to their circumstances to establish whether their classification and treatment continues to be appropriate.

5. The escalation procedure

Individual cases where vulnerable customers are at risk of an unfair outcome with situations that fall out of existing policy / procedure should be escalated an agreed team /senior management for review.

5: Signpost External Support

Whilst a business should provide whatever support it can to vulnerable customers to help them achieve a fair outcome, within the parameters of the business it is important that staff understand they are not rescuers.  It is key that all customer facing staff understand where consumers can get additional help and signpost them appropriately towards it. Details of the leading debt support & advice charities could be included on the company website and in a format which can be either emailed or posted to customers.

6: Develop Staff Support Process

It is critical that your customer facing agents have access to support to help them identify and implement appropriate customer treatment. Due to the wide range of customer vulnerabilities, it is very likely that staff will come across someone who they may struggle to find the appropriate path for or indeed may find distressing themselves. Support should always be available without judgement.

7: Monitor and Review

Customer facing agents calls and correspondence should be regularly monitored to ensure all customers are receiving appropriate and fair treatment. These should be reviewed from two perspectives:

1. To understand effectiveness of established processes and identify areas for improvements
2. To ensure all staff are fully meeting the vulnerable customer’s needs

If there are issues within staff handling of vulnerable customers which may put them at risk of unfair outcomes these should be highlighted, and appropriate training and support given. If following intervention and support a staff member continues to fail to identify and support vulnerable customers, they should enter your standard formal review procedure for failure to adhere to company policy.

The Barratt Smith Brown Customer Vulnerability and Debt Collection series of articles takes an in depth look the issue of customer vulnerability and debt collection to help debt collection teams:

• Ensure their staff have the right skills to recognise and respond to the needs of their vulnerable customers
• Have established processes to ensure vulnerable customer needs are met.
• Implement their customer vulnerability strategy across the business and then monitor and assess whether they are meeting and responding to the needs of customers with characteristics of vulnerability, and make improvements where this is not happening

Customers Vulnerability and Debt Collection Series

• Part 1: Industry overview
• Part 2: What is a Vulnerable Customer
• Part 3: How to Identify Vulnerable Customers in your Business
• Part 4: 7 Steps To Developing A Customer Vulnerability Strategy