UK Regulators Network publishes joint letter on debt collection
Published 11th April 2024
Simon Unsworth, Group Chief Risk & Customer Office, Perch Group
This letter follows on from another joint letter published in June 2023 which set out shared expectations on how firms in their respective sectors should support customers in financial difficulty and committed to considering what the regulators’ shared expectations are in relation to debt collection.
Frequency of collections communications
A key customer harm identified relates to those in financial difficulty feeling they are being inundated by collections communications in a way that may exacerbate their already difficult situation. The regulators want to see firms not only starting out with an appropriate frequency of communication but also being prepared to tailor and reduce the frequency if it is causing harm and not producing positive customer outcomes.
At Perch Group, this is already something we build into our customer engagement strategy for our debt resolution agency ACI. Our ‘common sense’ approach is based on the fact that we want the same thing as both our clients and the customers we deal with – a positive resolution. High frequency communication which isn’t being responded to and could potentially be causing unnecessary distress is counterintuitive and not in anyone’s interests.
Tone of collections communications
Secondly, the regulators want to see firms being supportive of customers from the outset and avoiding any communication that is intimidating or threatening. Our Trustpilot reviews are testament to how supported our customers feel in resolving their issues. We consistently see words like ‘understanding’, ‘helpful’, ‘reassuring’ pop up in these reviews and we work to ensure that this extends across all forms of communication from letters and emails to online chat, phone calls and our website.
We know that when our customers are at ease, we can help them much more effectively.
Ease of access to free debt advice
Finally, the regulators want firms to ensure that they are not only making it easy to for customers to seek free debt advice but also making it easy for advisers to engage with us on their clients’ behalf. This goes beyond the traditional ‘signposting’ that collections firms have done for many years, to a more collaborative approach that highlights the benefits and actively refers customers who are struggling and streamlines communication with advisers where customers have already reached out for support.
Engagement with advisers is key because we know what a big step it is for customers to seek debt help so when they do it is vital that we work with the advice agencies they have reached out to ensure they get the help they need. We ensure that we don’t put any barriers in the way of them dealing with us by providing clear reference numbers on all correspondence so that advisers can immediately get details of the account where they have authorisation to act on their clients’ behalf. This is an area we plan to work on more through things such as our membership of Money Advice Liaison Group (MALG) to understand how we can help advisers access the information they need.
Each of the regulators has set out rules, guidance and best practice relevant to delivering these outcomes in an annex at the end of the UKRN letter which we are reviewing and implementing. Read more and download the full letter here.