Zopa Implements New Digital Affordability Product

Digital bank and peer to peer lender, Zopa, has joined forces with Paylink Solutions and implemented its cloud based digital income and expenditure product, Embark.

Embark enables companies to easily support customers who find themselves in financial difficulties. It works by capturing information on a consumer’s total financial position; this is done either manually with the customer, or by accessing current account information using Open Banking. Embark also offers Credit Reference Agency integration which means that financial services organisations are then provided with visibility of a customer’s total debt position.

Zopa uses the Embark technology to help it to understand affordability for loan customers who have experienced a change in circumstances and therefore require a payment plan. The tool assists the lender in creating an accurate and appropriate repayment plan for its borrowers that require one.

Zopa loan customers who require additional assistance can access Embark via a self-serve portal or be taken through the online form with the assistance of a customer services agent. By teaming up with Paylink Solutions, Zopa is able to deliver customised payment plans in a faster, more accurate way.

Additionally, the Embark tool allows users to access debt advice with PayPlan, one of the largest free debt advice companies in the UK. This integration allows customers to self-refer themselves to PayPlan or for an agent to do so at the click of a button through a built-in API. This allows the customer to be digitally referred over for debt advice and avoid having to repeat the entire income and expenditure gathering exercise during the debt advice process.

Clare Gambardella, Chief Customer Officer at Zopa, commented: “Going above and beyond to support our customers has always been key for Zopa, but being able to help them as quickly as possible has been extremely important in dealing with the impact of the Coronavirus. Teaming up with Paylink Solutions to deploy the Embark tool at this time has enabled us to provide an even better experience for our customers.”

Sue Rann, CEO of Paylink Solutions, commented: “We are thrilled to see our Embark offering is supporting Zopa and its customers with fast-paced and class-leading digital support.

“We’d like to thank the team at Zopa for engaging with Paylink so effortlessly and highlighting what it can do in the peer-to-peer space. They took a leap of faith in their sector and all the hard work going into offering secure debt advice has paid off.”

Andrew Alder, Head of Partnerships at PayPlan, commented: “We are delighted to have supported Paylink and Zopa integrate Embark referrals into our services.

“From day one, we have seen Zopa’s customers referring themselves to PayPlan; this is in an age where customers want to self-serve more. It’s becoming more important for organisations, solution providers and debt advice providers to work closely to create innovative ways for customers to still be able to access advice in a frictionless way.”

Debt advice charities call for action to protect consumers from bad practice by IVA providers

Responding to a consultation today by the Joint Insolvency Committee on amendments to professional standards, the Money Advice Trust and StepChange Debt Charity say that changes proposed by the insolvency industry do not go far enough to protect financially vulnerable people from harm.

The charities are particularly concerned about the practices of lead generation companies that Individual Voluntary Arrangements (IVA) providers pay for referrals and are calling for the Insolvency Service to develop stronger rules for insolvency practitioners (IP) who accept referrals from lead generation companies.

The charities say there are still too many examples of misleading online adverts for IVAs by lead generators on search engines, including Google despite its tightening up of advertising for debt management services, and social media platforms. These adverts often impersonate advice charities and can mislead people seeking help and use their data.

Lead generator ads and websites often make misleading claims about IVAs. These harmful online adverts are incentivised by the referral fees which lead generators receive from IVA providers.

The charities are concerned that poor advertising practice is leading financially vulnerable people into unsuitable advice and debt solutions that are not appropriate for their circumstances, which can cause more financial harm and result in people paying unnecessary fees for the advice they are given.

The Insolvency Service’s 2018 review raised questions about how the commercial relationship between lead generators and IPs was incentivising inappropriate advice. Since then, the proportion of IVAs failing to deliver people the help they need has continued to rise. Figures showing increasing ‘break rates’ in the early years of IVAs are a particular concern – as is the disparity between the performance of IVAs arranged by different firms.

The insolvency industry response through revisions to its Code of Ethics and today’s statement of insolvency practice consultation are welcome and demonstrate awareness of problems in the IVA market, according to the two charities, but more needs to be done.

The charities say firms must be required to ensure that any leads they pay for are not the result of misleading or illegal online promotions by lead generators – an urgent first step in the much needed reform of the IVA sector.

Jane Tully, director of external affairs and partnerships at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “We see on a regular basis online adverts that make misleading claims about ‘debt write-offs’ and that impersonate free debt advice charities. These ads direct people to sites offering IVAs that can lead people in financial difficulty down a route unsuitable for their circumstances, causing further financial harm down the line.

“At a time when household budgets have been hit hard by Covid-19, it is crucial that people are protected and able to easily access the independent debt advice they need.”

StepChange head of policy Peter Tutton adds: “We appreciate that efforts are underway to improve the current inadequacies in regulation, but the risk in the current market is that many people in problem debt following the pandemic may prove easy picking for predatory IVA lead generators. This absolutely must be addressed urgently if vulnerable people are to be protected from harm.”

Omnichannel Communications Will Help Lenders Align to Latest FCA Support for Motor Finance Customers

Global analytics software provider FICO has responded to the extended support announced by the FCA for motor finance customers facing continued financial difficulties, which came into force on 17th July.

“With the latest ONS data showing that the UK payroll dropped by 650,000 in June, and many millions still on furlough, more people than ever need help managing their finances,” said Bruce Curry, vice president for collections and recovery consulting and sales at FICO. “The FCA’s extended support for those on motor finance and other high-cost credit is a welcome measure but will be challenging for many lenders to implement.

“The FCA has made it clear that care must be taken over the handling of vulnerable customers. But it’s not just about those who are typically profiled as vulnerable; there will be many borrowers who are facing financial hardship for the first time, due to COVID-19. Lenders need to find not only the right solution for these people, but the right way to communicate with them, at a massive scale, to reach the best outcome for both parties.”

FICO is advocating omnichannel communications strategies, directed by good data and analytics. Automated two-way dialogues across email, SMS, mobile apps, IVR and online sites become more powerful when driven by analytic strategies. And the firm believes that in terms of time-to-value, omnichannel communications are one of the quickest, most powerful solutions that lenders can implement, with a high return on investment.

“The key issue is to make sure the right data is being collected right now,” added Bruce Curry. “Lenders need to collect more data than what they have captured in the past, in order to understand the differences between COVID-19 related debt and non-COVID related debt, and to identify the customers that classic collections risk analytics apply to and those for whom it won’t work.

“It is also important to determine the likely return to financial good profile by customer segment, including whether they work in a protected industry; what circumstances drove their reduction of income; what has been the true level of impact on disposable income; and what is their likely return to good curve given their household dynamics and industry sector. By truly understanding the customer circumstances, lenders can communicate with the right frequency, through the most effective channel, for the optimal end result.”

Help for creditors following OFGEM announcement

Expert debt recovery lawyers have commented following Ofgem’s recent announcement that energy companies can go ahead and start pursuing unpaid energy bills, after the hiatus brought about by the immediate crisis of the coronavirus pandemic.

However, this does not mean that companies can simply demand payment from their customers. In making the announcement Ofgem have made it clear that suppliers are expected to treat customers equitably and consider their ability to pay. Ofgem have warned suppliers who take aggressive or unfair action that they may be subject to sanctions.

Stuart Hoysted, Technical Director at national law firm Clarke Willmott LLP and expert in debt recovery, says while the announcement will be welcomed by energy companies, the process must be handled in the right way.

“It is clearly important for both creditors and customers that the debts are not allowed to continue to grow. It is therefore not surprising that Ofgem have taken this stance,” said Stuart.

“Customers need to try to pay their debts. Leave it too long and the debt can be perceived as an insurmountable mountain – the larger the debt, the harder it is to resolve. The burden becomes yet another worry for families and individuals already struggling.”

On the other side of the coin, creditors and suppliers need the cashflow – they have a workforce to pay as well as the infrastructure and all the associated costs of running their business. Some creditor firms are suffering from the double impact of a huge increase of customers with debt, whilst handling the challenges of a socially distancing and perhaps even reduced workforce.

“In the current Covid-19 world the importance of creditors, from all industries, taking a fair and ethical approach to recovery efforts in accordance with the Ofgem guidance becomes paramount. Creditors should be actively engaging with customers because allowing the debt to continue to grow is detrimental to both,” continued Stuart.

“We have seen some creditors looking to outsource some or all their collection activities. If so, it is important to ensure that a collaborative working strategy is agreed with the chosen partner so that a correct and fair balance is achieved.

“Where outsourcing, choosing to work with properly regulated agents or solicitors who have a shared vision and are accountable, is more important than ever. At Clarke Willmott we understand the importance of working with customers to try and reach an early and amicable solution. This may be a repayment plan over several months for example, which may not be ideal but may be preferable in the current climate to incurring the outlay associated with court proceedings.

“It is also important to be able to move quickly to change strategies and update correspondence, to reflect the changing impact that Covid-19 has and will continue to have.”

Noble Conversations Analytics Insight 2.0 Named a 2020 Product of the Year

Noble Systems, a global leader in omnichannel contact centre technology solutions, announced that TMC (a global integrated media company) has awarded Noble® Conversations Analytics 2.0 a 2020 Communications Solutions Product of the Year Award.

Noble Conversations Analytics Insight 2.0 provides deeper vision into your customer interactions, so you can continually improve quality and build a better customer experience. The new “Comparative Cloud” allows you to compare the used phrases in unsuccessful calls versus those that are successful. Using Noble’s intelligent speech analytics framework and world-class text transcription engine, the Comparative Cloud functionality makes it easier than ever to find the right phrases to use on customer interactions to get the best possible outcome – as well as those that should be avoided. With Noble CA Insight, you’ll be able to easily compare how your least successful agents are communicating in comparison to your most successful agents.

Chris Hodges, Noble’s Senior VP Sales and Marketing, said, “The ability to monitor conversations, both in real-time and post-call, is becoming increasingly important, particularly as more agents are working remotely. Proactive feedback and coaching can help keep agents connected and engaged, while maintaining the quality of customer service. Our Comparative Cloud makes it easier than ever to find the right phrases to use on customer interactions to get the best possible outcome – as well as those that should be avoided. We are excited to have this innovation recognised as a game-changer by TMC”.

“Congratulations to Noble Systems for being honoured with a Communications Solutions Product of the Year Award”, said Rich Tehrani, CEO, TMC. “Noble’s Conversations Analytics Insight is truly an innovative product and is amongst the best communications products and services available on the market today. I look forward to continued excellence from Noble in 2020 and beyond”.

CSA Appoints Chris Leslie as Chief Executive

Credit Services Association (CSA), the voice of the UK debt collection and purchase industry, has appointed Chris Leslie as chief executive with effect from 1 August. A former MP, Minister and Shadow Minister with proven knowledge of public policy, parliamentary affairs, financial services regulation and consumer credit, he succeeds Peter Wallwork, who announced in December 2019 that he would be stepping down after ten years in the role.

Chris Leslie was MP for Shipley from 1997 to 2005 and for Nottingham East from 2010 to 2019.

Between 2001 and 2003 he was a Minister successively in the Cabinet Office and the Department for Local Government and the Regions; and from 2003 to 2005 he was Minister for Courts and Constitutional Affairs.

Between 2011 and 2015 he was a member of the Opposition Treasury team, as Shadow City Minister/Financial Secretary to the Treasury in the period during which the Financial Conduct Authority and Prudential Regulation Authority were set up, as Shadow Chief Secretary to the Treasury and as Shadow Chancellor of the Exchequer.

From 2005 to 2010, Chris was Director of the member organisation New Local Government Network, the leading local authority research and policy think-tank. During the same time, he was also a trustee of the Consumer Credit Counselling Service advice charity (now StepChange) and Credit Action (now the Money Charity).

Welcoming Chris as the new Chief Executive, CSA Board Chair Tom Chandos said: “I am delighted that the CSA’s new chief executive will be Chris Leslie, with his deep knowledge of public policy, parliamentary affairs, financial services regulation and consumer credit. He is the ideal person to build on the progress that the Association has made during the ten years under Peter Wallwork’s leadership, for which the Board is deeply grateful.”

Chris Leslie added: “Having been closely involved in financial services policy over recent years, I’m very much looking forward to my new role leading the CSA team, representing such a wide range of businesses and championing best practice across the collections and debt purchase industry. Credit is a crucial utility in today’s economy and safeguarding a fair and well-functioning market is more important than ever in these challenging times.”

The appointment has been made following a process advised by an independent search firm and led by a selection panel of the CSA Board comprising both elected, industry practitioner and independent board members.

PayPoint survey reveals renters’ long term post-COVID 19 financial concerns

As the UK eases out of lockdown and approaches the end of the furlough scheme, a survey of social and private renters* by the payment provider, PayPoint, has revealed significant concerns regarding future ability to pay on time. 25% of respondents are already at least a month behind on their rent, and a third are concerned about the impact COVID-19 has had on their long-term financial situation.

Encouragingly, 40% of social renters are confident that their long-term financial situation will improve as the UK recovers post-COVID-19, and most of those who have fallen behind have found their landlord sympathetic and flexible.

Overall, private renters are more concerned about the long-term financial impact of COVID-19, and less than a quarter (24%) are confident in their recovery post-COVID-19. Of the private renters who are behind on payments, 22% are concerned about their ability to catch up within the next 3-6 months, whereas just 10% of social renters shared these concerns.

Danny Vant, Client Services Director for PayPoint commented: “The global crisis has impacted virtually every area of our lives and the longer-term financial impact is becoming clearer. Our survey reveals real concerns over future financial stability and ability to pay rent. It is vital that both private and social landlords are sympathetic to the challenges their tenants are facing in these uncertain times. Offering payment flexibility will be important for tenants going forward, to help them navigate changes to their lifestyle and financial situation. This will ensure landlords can retain good tenants and continue to recover rent fees effectively.”

One in five of the renters surveyed said they would welcome the introduction of a digital payment platform that would remind them when payments are due and enable them to make flexible payments to help them manage their financial situation.

PayPoint’s new collection tool, PayByLink, available through its digital payment solution, MultiPay, helps landlords to engage with tenants sensitively and responsibly via SMS and email, to remind them of payment dates, make arrears collections and offer flexible payment terms. This will be particularly beneficial as the UK navigates it way through the financial impact of the COVID-19 pandemic.

Vant continued: “Late payment collection through PayByLink increases efficiency and reduces the cost of collections and write-offs. Tenants do not want to miss rent payments, but many facing significant challenges in the current climate have fallen into rent arrears. As our survey identified, many are very concerned about their ability to pay rent in the coming months, and how quickly they will recover, financially from the impact of COVID-19.

“Importantly, PayByLink provides tenants with payment flexibility, putting them in control whilst improving cashflow for landlords. The user-friendly payment options remove friction from the payment process whilst retaining security and peace of mind, increasing customer engagement and ultimately improving collections success. Working together with tenants, considering their financial challenges and providing payment flexibility, landlords can help tenants through this stressful time and may find they benefit from longer tenancies and more efficient payments in future.”

June corporate and personal insolvency statistics, R3 response

Christina Fitzgerald, Vice President of insolvency and restructuring trade body R3, responds to today’s publication of the corporate and personal insolvency statistics for June: “The June statistics show both corporate and personal insolvencies fell compared to May’s figures. The decrease in the number of corporate insolvencies was driven by a sharp reduction in the number of Creditors’ Voluntary Liquidations and a drop in administrations. While personal insolvency numbers have also remained low, with bankruptcies showing a particular fall, the overall picture is much cloudier due to a number of issues that have affected the processing of Individual Voluntary Arrangement registrations.

“Today’s statistics still do not show the effects of the pandemic on personal and corporate insolvency levels. In part this is because of the time it takes to set up and enter corporate and personal insolvency processes, but also because of the Government’s support measures, which will have provided a valuable safety net for many people and businesses.

“However, the economic contraction in April and May shows that consumer spending had halted, and consumer confidence was unsurprisingly low during both months, with no real improvement in June. People are naturally worried about their finances and the health of the economy over the next year, and with many thousands of job losses recently announced and with more predicted to come, it is easy to see why.

“Our members are telling us that requests for formal insolvency support have not been significantly higher than before the pandemic. However, there has been a significant increase in existing and new clients asking for support with managing a reduction in demand for their products and services, and guidance around how they can manage working capital shortages in cashflow forecasts as the economy gets moving again.

“The situation is still tough for many people with little sign of economic improvement on the horizon. That’s why anyone who starts to see problems with their business or personal finances should seek advice from a qualified source as early as they possibly can.”

Onguard expands UK sales team with Andy Bass

Onguard, the FinTech company dedicated to redefining the order-to-cash payment process, has announced the appointment of Andy Bass as New Business Development Manager as the company continues its UK expansion and exploits new opportunities in the region.

With more than 20 years’ experience within the IT industry in the UK and Europe, Andy has held a number of senior roles including as the UK CEO of a major multinational, where he was charged with improving the company’s cash conversion cycle through direction and focus on reducing the monthly DSO position of the company.

More recently he has held sales positions at a variety of SaaS-based businesses operating in the accounts payable (AP) and accounts receivable (AR) automation and incentive payments space. Andy’s appointment will strengthen Onguard’s position as it expands its presence in the UK following a period of continued growth in the region and increased demand for automated order-to-cash solutions from UK businesses.

Martin de Heus, VP of Sales, Onguard, commented: “The UK is already an important market for Onguard, and Andy brings added passion and experience to a growing UK team, as well as unique customer and sales experience. There has recently been a noticeable increase in interest from UK companies of all sizes seeking to fully automate their order-to-cash process from cash collection and allocation, to billings and risk management, and we are well placed to fulfill those needs.”

Andy Bass, New Business Development Manager, Onguard, added: “Onguard is the clear leader in the order-to-cash space and has the ambition to invest in its business and people to take its customers to the next level of AR automation, which makes it an exciting company to join. The recent acquisition by business transformation powerhouse Visma is a clear vote of confidence in Onguard’s business model and I look forward to sharing in the success of the business.”

Government must act to prevent council tax loading £158m in bailiff and court fees on to people who can’t pay following the pandemic

Bailiff visits – often to enforce debt owed to local authorities in the form of unpaid council tax – will start up again from 23 August, following a temporary ban during the coronavirus emergency. StepChange Debt Charity is deeply worried about the impact and calls for urgent action.

On a conservative estimate, people who owe more than £500 million of arrears accumulated on council tax since the pandemic, and who cannot afford to pay, could be hit by up to an additional £158 million of costs [see calculation in note 1 to editors] purely as a result of the bailiff and court fees that could be added.

This cannot be allowed to play out. Before Parliament rises for recess, the charity urgently calls on the Government to put in place additional protections in light of the ongoing financial crisis. While central Government has allocated some additional funding to local authorities and some additional flexibility about their own repayment of debt, this does not address the particular pressure that local authorities will face to resume bailiff enforcement that just makes things worse for households already struggling.

StepChange is calling for the Government to introduce a statutory pre-action protocol for council tax that would require councils to take certain steps before seeking a liability order for bailiff enforcement action, as well as amending the council tax regulations to enable local authorities to show greater flexibility.

The Local Government Association said in mid-May that 2020/2021 council tax receipts were already £506 million down. Research from www.stepchange.org in May suggested around 820,000 people had fallen into council tax arrears during the pandemic. The same research showed that over 4 million people had accumulated around £6 billion of debt and arrears attributable to financial shock caused by the pandemic.

It is very clear that the financial consequences of the public health crisis on households are not going to be resolved any time soon. Many people will lose their jobs, some of whom will not currently be aware that this will happen; many people who retain their jobs will nevertheless see their income reduced; many of those not currently in work will find it even harder to get into work and will be forced to rely on the benefits system for an extended period.

While forbearance is a regulatory requirement across the mortgage and consumer credit landscape, this is not the case when it comes to the enforcement of Government debt. Indeed, local authorities themselves can be penalised financially when they try to offer more compassionate, longer term and affordable repayment plans to those who owe them money.

It is perhaps then no surprise that local authorities are the highest users of bailiffs – referring 2.6 million debts to bailiffs, of which 1.4 million were for unpaid council tax, in the 2018/19 year. Yet bailiff firms, who are often dealing with some of the most vulnerable households, are subject to no universal statutory regulation. Too often this results in poor practice and excessive fees which exacerbate the financial difficulties already being faced by affected households.

The bailiff sector, through its trade body CIVEA, says that bailiffs will not enter people’s homes in the short term when visits resume (which, while welcome, begs the question why visits, and the fee of hundreds of pounds that each attracts, are appropriate at all). However, as numerous submissions to the Ministry of Justice’s call for evidence on bailiff behaviour testify [see note 2 to editors], to consumer organisations and the public it is unfathomable why a sector that operates in such a sensitive part of the market is not subject to the same kind of robust, statutory regulation that applies elsewhere in the debt recovery landscape.

In the absence of a reliable and credible regulatory framework, it is even more vital that the Government pays careful attention to the protections needed in relation to the collection of debts owed to local authorities in the post-pandemic landscape.

StepChange CEO Phil Andrew comments: “The issue of how commonly local authorities use bailiffs to enforce unpaid debts, piling shocking levels of fees and fear onto already struggling households, seems to go unnoticed as the Cinderella of the debt recovery landscape. That is wrong at any time, but in the wake of coronavirus it needs urgent attention.

“Local authorities need both help and a prescribed process from central Government to ensure that their first and foremost aim in current circumstances is to help their residents get back on their feet financially through affordable repayment plans, rather than to subject people who can’t afford to pay their council tax to even higher costs and stress.

“We call on the Government to amend the council tax regulations, and to introduce a statutory council tax pre-action protocol, to ensure people facing debt do not see their problems exacerbated by archaic elements of council tax regulation and practice that are lagging behind the Government’s wider policy objectives.”