For those individuals or organisations looking to outsource debt collection work, it is worth taking time to work out a list of priorities of what they want from a service provider. Value for money is likely to be top of the list (especially for those businesses that are still recovering from the effects of the economic downturn). Another item that ought to be high in any list of priorities is fair treatment of customers.
Those organisations unfamiliar with the workings of the debt collections niche may assume that fair treatment of customers is more to do with pure ethics and bears little or no relationship to achieving successful outcomes. In fact, as the leading UK debt collection agency Wescot demonstrates, fair treatment of customers tends to result in outcomes from which all parties benefit. This particular company has been at the forefront of best practice and has a proven track record when it comes to setting an example to other operators within this niche.
Use of technological solutions has an important part to play in this particular sector, as Wescot is well aware. Many companies use ‘smart data’ tools in which databases are cross-referenced as a method of tracing customer with whom organisations have lost contact. These can be useful but they can also have their limitations. One issue is that the majority of operators in this field use similar types of credit reference agency lead-generation data tools. The same information and data sources tend to be accessed on multiple occasions. If part of that information happens to be incorrect, multiple mis-traces can happen. It can be all too easy to assume the data is valid when in fact it is not. One of the unfortunate consequences of this can be that third parties are contacted in error on multiple occasions by multiple organisations.
Wescot knows that technology, when used in isolation or when put to use by inexperienced staff can have its limitations. When it comes to tracing customers, the company uses effective validation technologies coupled with experienced staff. Once a likely trace has been established, the company also recognises the value of re-establishing meaningful contact with that customer. This provides the opportunity for outstanding issues between organisations and their customers to be resolved in a manner that is appropriate to the circumstances of the customer.
Organisations choose to outsource their debt collections activities for a number of different reasons. First and foremost, many realise they do not have the resources or the time to deal effectively with debt collection work in-house. Under such situations, referring the work to a professional makes perfect sense. When choosing a partner to work with, cost effectiveness is generally at or near the top of an organisation’s list of priorities (especially at a time when many businesses are still in a state of recovery following the deepest and most prolonged economic downturn in decades). At the same time, it is important to pay close attention to a potential partner’s attitude to compliance. In particular, organisations should look closely at whether a debt collection agency is committed to treating customers fairly.
Most companies will claim in their promotional material to be committed to compliance. For anyone choosing a debt collection agency to work with, it is worth looking closely at such claims to check whether there is any substance to them. Wescot is a company worthy of particular consideration. This leading UK debt collection agency believes strongly in the importance of treating customers fairly. The company says such an approach is vital for achieving appropriate outcomes for individual customers.
The approach also brings considerable benefits to the organisations it works for. By engaging customers in a meaningful way, it makes it more likely that appropriate solutions can be worked out. It means, for instance, that agents and customers are able to come up with repayment plans that are achievable in light of the customer’s individual circumstances. This is far preferable to imposing a plan on a customer with little or no thought as to whether that customer is going to be able to stick to it. The approach adopted by Wescot makes it much more likely that the arrears will be recovered. It also increases the likelihood that the relationship between the customer and the business in question can be rehabilitated.
There is plenty of evidence to indicate Wescot takes ‘treating customers fairly’ seriously rather than paying mere lip service to the principle. The company carries out regular audits and is dedicated to regular monitoring. The company also recognises how important it is for customers to have access to free independent debt advice and is an active supporter of a number of charities in this field.
Where an organisation needs to re-establish contact with its customers, the temptation may be to concentrate solely on trying to find the quickest and cheapest option on the market. Against this backdrop, some businesses may be tempted to choose what is often referred to as a ‘data cleansing’ product to provide a light-touch indication of where a customer is likely to be currently residing. In some circumstances, such a product is probably going to do the job it is designed to do perfectly adequately. In other situations though, such an approach could result in missed opportunities for the business concerned. If it was to be used in isolation, this type of solution could end up doing little or nothing to help the organisation rehabilitate its relationship with the customer in a meaningful way and in a manner that is potential beneficial to both parties.
Wescot points out that once a likely location has been identified for a previously gone-away customer, there is a lot to be said for attempting to make actual contact with that customer. Assuming of course, the agent involved in this is has the requisite skill-set, effective face-to-face re-engagement makes it much more likely that a solution to the outstanding issue will be worked out that meets the needs of the business in question and at the same time, is realistically achievable from the customer’s perspective. Wescot is a leading UK debt collection agency that appreciates the value of treating customers fairly. This ethos has obvious benefits to the customer. It has advantages for the business too. It makes it much more likely that a meaningful relationship between the organisation and the individual can continue to exist after the issue in hand has been sorted out.
Once a likely location has been identified for a previously gone-away customer, there are also advantages to making actual and meaningful contact from a compliance perspective. Under the current regulatory framework, it is no longer acceptable for a company to press on with formal action and to ignore the fact that telephone calls have gone unanswered or that letters have not been responded to. Nor is it acceptable to engage in aggressive door stepping or other forms of inappropriate behaviour. As well as falling foul of the regulations, such behaviour is likely to have significant reputational repercussions for the company involved.
So far as the credit services sector is concerned, a lot of changes have occurred over the last five years since the beginning of the economic downturn. Some of those changes have come about as a consequence of the new regulatory framework ushered in by the Financial Conduct Authority (FCA). Other changes are linked to the habits and circumstances of consumers.
Before 2008, there was a much higher prevalence of interest-only and high loan-to-value mortgages. Over the last five years, these products have either disappeared completely or else have become much less common. This has implications for those companies who operate within the credit services industry and whose services include attempting to make contact with customers with whom businesses have lost contact. More individuals (especially would-be first time buyers and younger people) are more likely to be living in short-term rental arrangements. There is also a greater likelihood that customers are living with friends or family under informal arrangements. For those involved in the consumer credit industry, this can make it difficult to differentiate between the type of scenario where a customer has moved on and has merely forgotten to update his or her contact details and those situations where customers are actively trying to ignore attempts to re-establish contact.
What has also happened over the last few years is that more organisations are relying on ever-more technologically-driven methods of tracing customers. As Wescot understands, there is definitely a place for technology when it comes to validating customer details and ensuring that customer contact details and other information is correct. As far as Wescot is concerned, this is all part and parcel of treating customers fairly. Nevertheless, there may be limitations to relying solely on what is generally referred to as ‘smart data’. The company points to a noticeable correlation between the use of smart-data driven products on the one hand and an increase on mis-trace situations across the industry as a whole on the other.
Technology is a useful tool; but so is proven experience. Wescot is regulated by the Financial Conduct Authority and is a member of the Credit Services Association. The company has the processes in place to ensure full compliance with those bodies’ rules and guidelines. The company successfully combines up-to-date validation processes with vast experience in the field.