The Analysis News & Opinions
Call made for DCA consistency
Consistency of performance and analysis is a key interest for creditors outsourcing to a collections agency, according to a leading industry professional. Asked, at a round-table debate run last
month in association with ARC (Europe), what he would look for in a collections agency, Steve Empson, group central membership manager at David Lloyd Leisure, said: “I think that the big thing is consistency. I will use my DCAs as a barometer of how my team is performing and look for opportunities where we can get better. If I see my DCAs collecting a higher percentage, then there will be areas to work on locally. In that way, I see a DCA as being an extension to my debt-collection process. “I will always come back to consistency,
and that consistency comes from the data analysis and the technology that they offer. If the technology and the data analysis is not forthcoming, then that is not good enough. I want consistency of collections and consistency of dealing with member issues, because if they are getting more negative feedback than locally,
then there is
something that we need to talk about.” Neal Turner, head of recoveries at
Nationwide Building Society, added: “It starts with the in-source or outsource question: people have different drivers for wanting to in-source or outsource the work. “With most suppliers, typically, you
outsource because you do not have the skills or competence internally, so solicitors and legal work relating to debt recovery would be a good example. But, with DCAs, most operations, including ours, would have that internal competence to undertake the activity. “So then you have to think why it is that
you would outsource and, I think, the reasons are many that we have mentioned today, whether it be benchmarking, or more internal efficiency, or investment in the tools of the moment; innovation would be another example. For us, primarily, we are looking for a service that engages our members where our internal attempts were not successful in doing so.
November 2017 “So the in-source or outsource decision is
key, and then defining what it is you want from the service, what are the key things that you are looking for, and from that will flow remuneration. My thinking, and that of Nationwide as a whole, has changed on that in recent times, prompted by the regulator’s interest in employee remuneration and the focus in terms of the balance between fixed and variable pay. My reading of this is that it should also apply to business-to- business remuneration in terms of getting the right balance. “Traditionally, DCAs have been
remunerated through that variable amount, which is commission, but our thinking has changed in that respect, coming back to the service we are fundamentally trying to provide. Sometimes engagement with the customer, and understanding their circumstances, may not lead to a payment, but that service is really important and we must
look to make sure our
remuneration model recognises that balance and looks to reward fully for payment, but, moreover, for getting the right outcome.” Meanwhile, Dewi Fox, managing director
of ARC (Europe), said: “We have different clients with different demands. Some will be all about performance, all about collections, whereas others will be focused on consistency; others will just focus on customer outcome and the quality of the call. Some clients will be extremely proscriptive – you must do X, Y, and Z – whereas others will say ‘you are an authorised business, you know best, so you choose’. We have to try to wear a lot of different hats. We get quite good at it because we are quite small and nimble, but it is interesting and challenging at times.”
www.CCRMagazine.co.uk Opinion
‘Time to tackle the popular misconceptions’
The financial pressures that exist for most people are increasing, and, as a result, there continues to be a demand for short-term credit products from ordinary people with needs for cash when things do not go to plan. A report we commissioned with the Social
Market Foundation highlights that there continue to be misconceptions about people who use short-term credit. The research shows that customers are often unfairly stigmatised when, in fact, they hold down jobs, have bank accounts, and, contrary to some perceptions, consider themselves to be coping financially and are comfortable with borrowing on a short-term basis. The FCA’s Financial Lives survey showed
last month that customers are notably more likely to be younger in age, often with dependents. They are also often excluded from mainstream credit for a variety of reasons, and are less likely to be able to access funding from family and friends. These factors point towards an increased need to access credit markets in the event of cashflow problems. Much of the debate around short-term
lending lacks factual basis, and is often based on perceptions that people using short-term credit could use ‘traditional’ bank finance as an alternative, or simply postpone purchases until they have accumulated sufficient savings. The reality, however, is very different for many young people. A lack of access to mainstream credit to fund a necessary purchase or repair could leave households facing short-term difficulty. We know there is a need for improvement
in the short-term credit market. The cost of borrowing and unexpected fees are commonly- cited downsides of short-term credit. We want to highlight the industry’s duty to ensure customers are treated fairly and that the cost of our products is as transparent as possible.
Scott Greever Managing director, Elevate Credit UK
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