Comment: FCA support for consumer credit and our concerns

Following the news that the FCA has confirmed the support users of certain consumer credit products will receive if they are still experiencing temporary payment difficulties due to coronavirus, John Perez, Partner at DWF, said: “The FCA’s decision to provide further support for consumer credit customers is undoubtedly good news for those who are continuing to feel the impact of Covid-19. However, the move raises concerns about how the industry itself will continue to cope on a financial basis.

“In the motor finance market, we have seen new business in April reduce by 94% compared to the same period last year. And in addition to this significant drop in new business, lenders will continue to have to take the hit on defaulting accounts, ensuring that they provide support and forbearance over and above usual standards. It’s a cost that will bite right into lenders’ bottom lines.

“The general economic outlook will mean that the cost to lenders in ensuring they meet the new temporary measures set by the FCA will place a significant strain on liquidity and profitability.

“The Finance Leasing Association have called for the Government and Bank of England to support lenders at this crucial time.

“Lenders should look to automated solutions that customers can use to implement forbearance solutions. There has been an unprecedented demand on lenders and their call centre teams over the last few months, leading to disgruntled customers who are often waiting hours before calls are answered. Those lenders who began planning for this contingency at the start of the lockdown are likely to be in a much stronger position to service their customer base.”

EQ launches new automated complaints product for the financial services industry

EQ (Equiniti), the international technology-led services and payments specialist, is delighted to announce that it is launching a new automated complaints management product for the financial services industry – EQ Complaints Professional.

EQ Complaints Professional is a powerful complaints solution that will enable firms to enforce their FCA compliance immediately and on a continual basis as regulation evolves.

The solution’s automation and machine-learning capabilities will ensure companies meet regulatory requirements to a higher and more consistent standard, eliminating the risk of rule breaches. By streamlining operations, it will also allow staff to focus more on individuals, to achieve better customer engagement and outcomes.

Based on over 20 years’ worth of complaints management expertise and specialist skills, EQ Complaints Professional benefits from the advanced proprietary technology of the wider EQ business.

The tool is quick to deploy and cloud-hosted, providing firms with secure SaaS functionality. Its scalable model allows EQ to tailor the service to individual businesses to suit the level of customer interaction.

Andrew Edler, MD of EQ Charter, commented: “We are delighted to bring this exciting new product to market which will allow financial services companies to strengthen customer engagement while complying with the significant regulatory burdens they face. Our products and services will help optimise their continued compliance with FCA regulations, and give them greater capacity to focus on providing an excellent customer experience.

“This product will enable businesses to streamline their operations, reduce cost, minimise compliance risk while improving how they engage with their customer base.”

Covid-19 crisis piles on payments pressure – UK firms face unparalleled uncertainty

The Covid-19 crisis is forcing British businesses to accept unfavourable payment terms, according to a white paper published by credit management group Intrum.

The survey found that 80 per cent of the UK’s businesses have accepted longer payment terms than they are comfortable with as they do not want to damage client relationships. This is despite the fact that 44 per cent of UK businesses said late payment by customers threatens their survival – up from 17 per cent pre-Covid.

The European-wide white paper confirms the negative financial impact of the Covid-19 crisis on business outlook, payments, and financial behaviour. The survey was conducted among financial executives and business leaders in 9,980 companies across 29 European countries.

The risk of pan-European recession is the main challenge facing customers paying on time over the next twelve months, according to UK respondents. More than two-thirds (67 per cent) rank this among the top three challenges, compared with 57 per cent across Europe. This increases from 50 per cent of those surveyed before the Covid-19 crisis to 75 per cent during the Covid-19 crisis.

With Europe heading for recession, 42 per cent of British businesses expect it to have a severe impact on them, and 31 per cent plan to cut recruitment as a result.

Late payment is also a greater threat to survival in today’s environment, with 51 per cent saying it reduces their liquidity, compared with 23 per cent pre-Covid. Over half (52 per cent) of UK businesses say that macroeconomic uncertainty has caused them to extend their payment terms to suppliers over the coming year – up from the European average of 41 per cent, and the highest in Europe.

“The pandemic has piled pressure onto businesses in an unprecedented way and many firms do not have the flexibility to survive late payment,” said Intrum UK Managing Director Eddie Nott.

“With pressure on cash flow, timely payment is more important than ever as businesses struggle to navigate the loosening of lockdown restrictions. The long-term economic effects of the Covid-19 crisis are not yet clear, but in the short term many UK businesses face a battle for survival.”

Against this backdrop of exceptional change and disruption, businesses are looking for extended help to navigate through the challenges – 56 per cent said they feel new legislation is needed. There is also a rise in the adoption of the EU Late Payment Directive, despite the UK’s exit from the EU: 27 per cent of UK businesses in the survey say they always use it, compared with 5 per cent in 2019.

“Awareness of the impact of late payment and the options open to businesses under EU and UK legislation is important. These and further voluntary initiatives will be essential in ensuring steady cash flow for UK businesses as we emerge from the immediate crisis,” said Nott.

Arum announces two promotions within senior leadership team following record year

Following the end of our most successful financial year ever, Arum is pleased to announce two senior promotions within our senior leadership team, effective from 1 July 2020: Cormac O’Sullivan (formerly Delivery Lead and Principal Consultant) will take on the new role of Director of Professional Services, and Matt Riddall (also formerly Delivery Lead and Principal Consultant) will become the new Director of Advisory.

Cormac has worked at Arum for six years, and during this time has led many system implementations for the biggest financial services institutions in the UK and grown Arum’s client base significantly. As Director of Professional Services, Cormac will be responsible for large-scale projects and services for our clients, including retail banks, government departments, challenger banks and financial institutions. He will provide oversight and evaluation across client engagements to ensure high quality is continuously delivered.

Cormac commented, “I am fortunate to work with an exceptional team, all of whom are motivated and focused on providing the best support and solutions to our growing number of clients.”

Matt joined Arum’s graduate programme in 2008 and quickly established himself as a leader of the future. During his time at Arum, Matt has worked on and led over 40 vendor product selection, current state assessment and collections technology vision definition projects for c.35 clients across retail banking, financial services, utilities and system vendors. As Director of Advisory, Matt will be responsible for engagements to review, assess and improve clients’ operations, strategy, analytics, organisation, MI and technology, as well as developing new and innovative products and services for our clients.

Matt commented, “I am excited to start this new role, working with a hugely experienced team which has unrivalled knowledge of collections and recoveries, to guide and support our clients through these challenging times.”

Both Cormac and Matt join the senior leadership team which includes Andy Pritchard, who was promoted to CEO from Managing Director in July 2019, and Scott Collin, who took on the permanent role of Chief Commercial Officer in April 2020.

Andy Pritchard added, “I am extremely pleased with the results from the past financial year, especially during such a challenging time. I am also delighted that Matt and Cormac have accepted these new roles and believe we have a strong senior leadership team which can continue to deliver growth alongside exceptional service to our clients.”

See who else makes up our management team.

Industry’s first-ever virtual enforcement solution launched. Could this be the future of enforcement?

Just has spent its time during lockdown engaging with a broad range of stakeholders across the industry to design, build and launch the industry’s first-ever virtual enforcement solution.

Virtual enforcement will be performed by qualified and trained enforcement staff from the comfort of a desk rather than in a debtor’s home. Debtors will be able to arrange suitable payment plans and arrange a time and day for a virtual visit to take place to secure the arrangement against goods but without the distress of having an enforcement agent turn up and enter their home.

Virtual enforcement will offer a more efficient and responsible way to deal with debt during the difficult times ahead but still allow for traditional enforcement to be used where effective and when absolutely necessary. The virtual enforcement solution will also reduce the cost traditionally passed onto the debtor at this stage by 50%.

Nick Georgiades, Just’s Managing Director commented on the launch “our team have been working day and night in the design of this solution and we are confident that this is the biggest innovation brought into the industry for over 100+ years. Getting early debt resolution by positive engagement with the debtor and reducing confrontational activity from the doorstep has always been an objective of Just and since launch in September 2019 we have made great progress, Virtual enforcement is a game changer. Any enhancements in a primitive sector like enforcement are good, but one as revolutionary as this, that also brings substantial cost savings to the debtor and a better user experience for all, should be celebrated and that’s what we intend to do. We could not have achieved this without the input of key Government, customer and debt advice sector engagement and I am thankful to them for that”.

Jamie Waller, Just’s Founder and Chairman said, “we have seen a sudden acceleration of a 25-year-old trend over the last few months of – “if I can do it online, I will”. We believe the investment the public has made in using new virtual solutions is here to stay. COVID-19 gave us the opportunity to think about a solution that was not only fit for purpose during a crisis but fit for the future and that’s what we have achieved. I am even more excited that virtual enforcement reduces the cost passed onto the debtor by as much as 50%. This allows our customers to get their principle amounts faster while treating the debtor fairly. Something that traditionally in this sector has been difficult to achieve”.

Yvonne Fovargue MP, Chair of the All-Party Parliamentary Group for Debt and Personal Finance said “It is vital that we support people in debt, particularly at this difficult time. The new virtual enforcement tool is clearly a step in the right direction. By reducing costs for the debtor, it will help to take some of the stress out of the debt collection process. I wish the same could be said for the proposed return of bailiff visits, particularly without any additional protections for those in debt. It will simply add to the problems faced by those struggling to repay”.

Benjamin Napier of Citizens Advice commented “any solution that gives the debtor the ability to engage without an enforcement agent at their door is a good thing”.

Just believe that the virtual enforcement solution provides creditors a service that is fair, proportionate, and fit for the future of enforcement in a modern world. Just chose to launch this solution on 1st July so that it will enable creditors to have this new, fare and cheaper option available for when they choose to get back to collection activity.

New online tool to help people navigate finances in wake of Covid-19

The Money and Pensions Service is launching a new online tool to help people navigate their finances in the wake of Covid-19 and avoid financial issues worsening in future, as the organisation reveals over 1 million people have already looked to MaPS for help dealing with the financial impact of the pandemic.

The Money Navigator tool, available on the Money Advice Service website, asks people a short series of questions about their financial situation, before providing guidance which is personalised according to their needs. It will highlight areas where they should consider taking action most urgently to avoid money problems later on.

Money Navigator is designed to help people who have seen their finances impacted by Covid-19. This includes people dealing with complex financial situations who may find it difficult to know where to start, such as those facing redundancy or job loss, the self-employed whose work has dried up, and people who have had a temporary income drop who need help to get back on track. The tool will also help people who are looking for support in a specific area, as well as those who might be in a better financial position due to Covid-19 and want to know what to do with any savings they may have built up.

A lot of the people expected to need Money Navigator are those who have been taking payment breaks on mortgages and other products. Figures from UK Finance reveal 1.9 million mortgage holidays have been granted since March, as well as 961,700 payment deferrals on credit cards and 688,900 payment deferrals on personal loans.1 Some repayments are expected to start from mid-July.

The tool will also help many people find support from other organisations, such as:

  • StepChange, National Debtline and PayPlan for debt advice and Business Debtline for business owners
  • Citizen’s Advice and Turn2Us for help with benefits and Universal Credit
  • Shelter for housing support

Other resources will include guides from the Money Advice Service website.

During the pandemic, services provided by MaPS have seen:

  • 1,016,000 people viewing Covid-19 content on the Money Advice Service and The Pensions Advisory Service websites since the pages went live in March
  • 1,300,000 people viewing information about benefits on the Money Advice Service website since March
    106,000 people looking at the mortgage payment holidays content on the Money Advice Service website since April
  • Nearly 99,000 customers supported via webchat and the phone since the start of April. The three consumer websites – for the Money Advice Service, The Pensions Advisory Service and Pension Wise – have had nearly 7.5 million users.

Eileen Pevreall, Digital, Marketing and IT Director at the Money and Pensions Service said:
“From our experiences on the financial health frontline these last few months, we know that many people are facing complex situations and multiple money issues, which can make it hard to know where to start in terms of getting help. But it’s really important that people know they are not alone in this. By spending as little as 30 seconds filling out some details on our Money Navigator tool, people can receive tailored guidance that will help them understand what they need to prioritise, what they could be entitled to and which organisations they can go to for immediate support.

“Seeking support for money problems now will help many people avoid bigger debt problems later on.”

Members of the Money Advice Service Coronavirus and Your Money Facebook group have shared details of how Covid-19 has placed them in complex financial situations. Charlotte, 26, a franchisee from the North West of England found herself in financial difficulty when the Covid-19 lockdown began and had to take payment holidays. People in similar circumstances to Charlotte could benefit by using Money Navigator to work out priority next steps.

“I started my own franchise in 2019 but when the pandemic hit, overnight 70% of my household income vanished as my business had to temporarily close and my husband was also furloughed to 80% of his wage. To get by, we took a three-month payment holiday on our mortgage and our car finance, and delayed council tax payments for two months. We accessed some employment support and thankfully had a savings safety net to fall back on. I also used the Money Advice Service’s Facebook group ‘Coronavirus and Your Money’ to keep up to date with information relevant to my situation and accessed money guidance on the website.

“Our payment holidays are coming to an end soon, and I have found another job so I am confident we can afford to resume repayments, as the increase on our mortgage is only £20 extra a month and it is spread out over a longer term. I was glad to have the breathing space initially. However, I am still concerned the way back over the next few months will be challenging.”

Phillips & Cohen announces vulnerable customer expansion plans

Phillips & Cohen Associates, Ltd., the leading specialist recoveries management business servicing creditors in the US, Canada, UK, Ireland, Australia, New Zealand, Spain, Portugal and Germany has announced plans to expand into the servicing of potentially vulnerable consumers.

The business, which has been consistently recognized for its compassionate engagement model during its 23-year history, is reacting to client demand for this new service alongside increasing market demographic need.

As one of a number of ventures to initiate the service, Phillips & Cohen Associates has been selected by UK Debt solutions provider, TDX Group, to help launch their V+ service, an innovative approach which will seek to combine proactive data analytics and best of breed communication strategies to provide superior levels of service to potentially vulnerable consumers. PCA were selected because of its long-standing reputation for dealing with consumers in an empathetic & positive manner.

Nick Cherry, Chief Operating Officer added, “As a business, PCA has always prided itself on the ability to engage with consumers at the most sensitive of times. We believe in treating people with dignity and respect, and this makes dealing with potentially vulnerable consumers a natural extension of our existing niche services.”

Adam S. Cohen, Co-Chairman/CEO commented, “Based on our unique credentials, vulnerability is a market which our clients have been encouraging us to enter for some time and we are gratified to continue to be recognized as a market leader in standards of consumer engagement. Sadly, the pandemic has impacted more households in all countries than was previously conceivable, and we feel that now is the right time for PCA to help to ensure that families receive the appropriate levels of support which they need to recover.”

Vivaticket forms global partnership with Skrill

Vivaticket, a major international operator in the creation, production, marketing and management of integrated electronic ticketing and access control systems, announces a global partnership with Skrill, a digital payments leader which is part of Paysafe, a leading specialised payments platform.

Vivaticket sells more than 3.9 million tickets per year in 50 countries through responsive portals and mobile apps. Following the new agreement, Skrill will be available as a payment option at the checkout for customers buying tickets for leading sports teams and venues including basketball and football, iconic sporting events such as golf Ryder Cup matches, major theatres across the world, and live entertainment such as upcoming concerts from Andrea Bocelli, Foo Fighters, Avril Lavigne and Aerosmith. In addition, via Skrill’s Quick Checkout solution, Vivaticket customers will be able to pay by online bank transfer using Rapid Transfer, a bank transfer solution that allows merchants to receive funds in real-time from consumers in 19 countries.

Further to AC Milan’s recent announcement of Skrill as its Official Global Payments Partner, the team’s fans will also have the option of using Skrill’s digital wallet when buying match tickets and other AC Milan experiences through Vivaticket.

Founded in 2001, Skrill is a leader in digital payments. For businesses, Skrill’s Quick Checkout solution supports multiple payment methods including credit cards, prepaid cards and real-time banking solutions in over 100 countries. Merchants using Skrill are able to promote their services to millions of Skrill users around the world. Skrill also offers chargeback protection, to give merchants greater peace of mind that payments accepted using the Skrill platform will be received.

Luca Montebugnoli, Executive Chairman of Vivaticket, commented: “As an increasingly popular payment option, we are delighted to be able to offer Skrill as a way for customers to purchase more types of tickets and experiences. A convenient and smooth experience at the checkout is a vital part of our customer journey, and offering multiple payment methods is central to this.”

Lorenzo Pellegrino, CEO of Skrill, NETELLER and Income Access at Paysafe, commented: “We are excited to be working with Vivaticket more broadly, supporting the expansion and success of its business by enabling a new and convenient way to pay. Skrill offers choice at the checkout, allowing businesses to add multiple local payment methods with a single integration, and giving consumers the ability to use their preferred option to make quick and secure payments.”

ZZPS Limited joins the Good Business Charter

ZZPS Limited is delighted to announce it has joined companies such as Deloitte and Capita in signing up to the Good Business Charter (GBC), an accreditation that seeks to raise the bar on business practices for employees, tax, the environment, customers and suppliers.

ZZPS Limited is proud to be the first in the private parking sector to join the GBC. It has never been more important for businesses to regain trust and show they care about more than just profit.

The Good Business Charter is available to all companies and charities with 10 employees or more across all industries and sectors. At a time when people are caring more about who they work for and who they buy from, the Good Business Charter offers a straightforward accreditation which recognises organisations which prioritise and care for their employees, the environment, customers and suppliers, whilst also paying their taxes according to the spirit of the law. The GBC and its members seek to inspire many other businesses to follow suit.

The Good Business Charter has the support of both the CBI and the TUC which both have trustee representation on its board. Other partners of the GBC include the Living Wage Foundation and the Prompt Payment Code. The GBC has been set up by a charity called the Good Business Foundation.

Chairman of the GBC board, Simon Fox, said: “The Good Business Charter brings together 10 standards, most of which already exist, but in separate places. We have bought them together to give a coherent overall position for businesses to aspire to. We believe that the GBC has enormous potential to change business practice for good. We hope that because of its simplicity and cost effectiveness, it will quickly gain support.”

Gary Osner, Managing Director of ZZPS Limited, said: “I am delighted that ZZPS has been accredited by the Good Business Charter as ZZPS has put the customer at the heart of its business since day one. Being the first business from the private parking sector to be accredited is also a great achievement.

“Prior to hearing about the Good business Charter, ZZPS became both a Living Wage Employer and Investors in People accredited and are justifiably proud of the way we engage with our colleagues, clients and customers alike.

“Becoming part of the Good Business Charter demonstrates our commitment to maintaining our general ethos, and we are very proud to be part of this community. We will be encouraging other organisations from the sector to sign up to the Good Business Charter to promote a positive business ethic.”

StepChange welcomes Government intention to get its debt management house in order

StepChange Debt Charity welcomes the Cabinet Office’s call for evidence published today on fairness in Government debt management. For too long, debts owed to government have been subject to inconsistent and poor practice, leading to harm and potential danger to vulnerable people. Seeing the Government accepting the potential case for change is a significant step forward.

The charity strongly welcomes Government Minister Lord Agnew’s overarching introductory remark, “Together, we can build a fair, ethical and compassionate approach to debt management that focuses on getting people out of debt, not on getting debt out of people”, and will fully engage with the issues and submit a detailed response by the September deadline.

StepChange Debt Charity head of policy Peter Tutton, who is also a debt advice sector representative on the Fairness Group [see paragraph 21], says: “Not before time, this call for evidence genuinely seems to see the Government looking to learn from others what it can do better and differently, drawing on best practice and better mirroring the principles and rules that apply to regulated lending.

“The Government has some serious catching up to do. Despite bringing forward some excellent new initiatives such as the forthcoming Breathing Space scheme, the Government’s approach to assessing affordability can be poor. The inflexible mechanisms it sometimes adopts to pursuing its own debt, frighteningly but fruitlessly, from people who cannot afford to pay are long overdue for reform.

“While bailiffs are barely mentioned in this call for evidence, the Government must not wait to conclude this call for evidence about its own practices before taking specific action on bailiffs. Local authorities are the main users of bailiffs to enforce debts like council tax, and their practices can be shocking. So the approach needs to be two-pronged: improving the regulation of the bailiff sector, and improving the way in which central and local government go about debt management. These are separate but both crucially important reforms that need to happen as a matter of urgency.”