In Focus Collections
Voluntary progress
New technology is seeking to make the voluntary-termination process ever more efficient and fair
Chris Jenkins Client services and technology manager, Wrights Recoveries
chris.jenkins @
wrightsrecoveries.co.uk
We have long realised the importance of regulatory technology within the financial services and motor-finance sectors, focusing our efforts on a technology that provided an innovative solution to the conventional mechanical and, often unfair, voluntary- termination (VT) process. We set one key objective: to get the VT end-to-end process down to seven days, from the point the customer exercises their right to VT, through to the vehicle being collected and VT liability, including de-hire charges, being crystallised. The solution needed to be transparent to the customer and demonstrate TCF throughout, whilst allowing lenders to use technological advancements to compliantly process their VT portfolios, spreading risk and mitigating end-of-cycle losses. At the same time, it should allow them to engage with their customers and increase brand reputation. When we spoke to our industry peers, they
said it was impossible to do! Our VT Validate product was designed
in January 2018 following extensive R&D which identified an increasing trend in VTs across the industry, not only from introducing dealers actively encouraging a
customer to VT their agreement in order to sell the customer a new vehicle, but lenders utilising it as a solution to surrender vehicles earlier without the need for a hostile repossession process. VT Validate was released to the motor-finance sector in September 2018 with six UK lenders now actively using the platform. VT Validate is a web-based application, designed and engineered for use on mobile devices such as tablets and smartphones, which enables a lender to take back control of the VT process. The technology service benefits all hire purchase and conditional-sale lenders with the addition of DCAs for the back-end debt-collection process. Being developed using new decision
engines and cost matrixes enables VT Validate to accurately determine and inform customers of damage charges at the point of VT. VT Validate is able to provide a transparent and fair voluntary termination process for the customer, allowing them to make an informed decision to VT based on the ‘true cost’ methodology.
A slick and easy-to-use user interface allows customer to seamlessly navigate through the complete VT process, providing clear communication between user and VT Validate application
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Challenges and objectives The traditional ‘manual’ VT process is slow, and typically involves the lender asking the hirer to send a written request to formally enact their right to terminate their agreement. Once received, the agreement is terminated, and the customer is duly bound to return the vehicle as the termination is irrevocable. Collection is arranged, often with a cursory vehicle inspection and then delivered to a re-marketing centre where it is assessed for damage. Several weeks later, the customer is contacted with a request to pay for any damage in excess of ‘industry fair wear and tear’.
www.CCRMagazine.com Customers are not able to make an
‘informed decision’ prior to VT and are not provided with a ‘true cost’ of the termination until after the agreement is terminated. This process often results in a complaint,
or dispute, relating to the damage collectable after vehicle recovery, and some lenders compound their losses by making a commercial decision to not pursue outstanding damage liabilities due to the weakness of the traditional VT process. In summary, the hirer is subjected to a
‘blind VT’, as they do not know the true cost to VT their agreement prior to making what is a very important and life changing financial decision. Our research indicates that the overall
process takes in excess of 35 days and the average VT loss experienced by a lender prior to using VT Validate was upwards of £3,000 per termination. VT Validate turns the VT process on its
head using automation. A slick and easy- to-use user interface allows customer to seamlessly navigate through the complete VT process, providing clear communication between user and VT Validate application. Information is presented clearly and jargon free, and ‘click here to agree’ checkboxes confirm the customers’ acceptance and awareness of their contractual liabilities. Following a customer’s request to VT, a
secure encrypted access link is sent via e-mail. Customers are required to register their details as part of VT Validate sign-in and security procedure, and the customer is provided with an Appraisal Guidance and Vehicle Return Standards e-document. VT Validate then guides the end user through the VT process by asking a series of multiple- choice questions regarding the vehicle’s
December 2019
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