Debt body urges members to increase dialogue and support for customers in wake of tough economic environment

Regional and local lockdowns and a difficult economic environment are adding to the burden of customers committed to keeping up with debt repayments and need to be handled with increasing sensitivity.

Customers may also need new advice, and old assumptions about a customer’s ability to pay may have to be discarded.

These are two of the key reminders issued to debt collection agencies by their trade body, the Credit Services Association, in a new ‘Key Considerations’ document published today as the country moves into the next and challenging phase of the pandemic period.

The document reminds members of their commitment to the CSA Code of Practice, which already addresses the importance of forbearance and the need for clear customer communication, and recognises the constantly shifting sands that characterise the current economic landscape.

Chris Leslie, Chief Executive of the CSA, says that members already demonstrate exceptional levels of customer service, but the country is facing an unprecedented challenge: “It is imperative that the collections and recoveries sector continues to demonstrate adherence to the highest standards of professionalism and integrity,” he says, “and provide even more sensitivity and even greater latitude and forbearance where appropriate.”

Mr Leslie especially urges forbearance in relation to the use of litigation and enforcement: “Litigation will be subject to increased scrutiny and it is more important than ever that any decisions to litigate or enforce must be demonstrably fair and reasonable, and subject to a robust and well-recorded decision-making process before proceeding.”

The document suggests that an increase in vulnerability through unemployment and mental health issues is highly likely. While the industry has led the way in identifying and working with vulnerable customers, Mr Leslie again says that extra caution is required: “Firms should endeavour to undertake as full an assessment as possible of customer’s circumstances and follow the latest FCA guidance,” he added.

Signposting customers to specialist advice is also critical: “How firms signpost to debt advice will be increasingly important and we encourage members to look at their websites and communications to review the clarity of the information they provide,” he adds.

“Our members are very familiar with the need to provide time and space for advice to be given and need to take into account that the advice charities may struggle to keep up with demand. It is important that the most vulnerable are not left unsupported.”

Communication, Mr Leslie stresses, is key: “We remain firmly of the view that customer dialogue and engagement is the best antidote to debt problems compounding into unsustainable circumstances and our members must continue to reach out and discuss issues with customers as early and as far as possible.”