In Focus Consumer Credit
Left-right: Dawn Stabart; Harry Hughes; Katherine Bailey; Martin Parr
What approach have you taken to define vulnerability ensuring you are able to acknowledge social impacts? As a firm how have you been able to identify those who have been negatively impacted by changes socio-economic status? SC: I think that, almost by definition, if you have a customer who owes something that they are not paying back in the way that you intended, then they have the potential to be in some kind of status of vulnerability, whatever that is. We are working with our industry
partners and organisations and I have not come across anyone who is not focused on vulnerability. Of course, the clients that the debt
advisers will have the opportunity to meet are further down the process, but it is of concern, as an industry, that we are all so frightened to overlook vulnerability, and that is almost a greater fear than actually focusing on why a customer is not paying.
SS:We have the vulnerability debate for a number of years. It is this back-end piece of how we pigeon-hole things. We tend to say ‘oh, mental health goes over here, that is one thing, and then you have people who just cannot pay because they have lost their job, and that is another thing, and then you have something else’, and that is fine, but what do the treatments look like? I think we only ever scratch the surface
of this: what is the treatment for that customer when you realise – either through a conversation or new tools like Open Banking, where you can see the disposable income disappearing – that there is a problem? What does that look like as a business: what are doing, at the front end, to identify
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The agent feels absolutely terrible and the cost has been high to the organisation. If you had right mechanism for agents to say ‘this does not work, I am going to be listened to, and somebody is going to fix it’, then everyone is a winner
it, and then how are we putting them into the right treatment? I hate this pigeon-hole thing.
PM:When things go wrong, it can cost you a lot of money. One can think of an example of agents continuing to churn through a really bad situation, making it much worse for the customer. The agent feels absolutely terrible and
the cost has been high to the organisation. If you had right mechanism for agents to say ‘this does not work, I am going to be listened to, and somebody is going to fix it’, then everyone is a winner. So organisations that do not have the right
culture, are never going to keep up in what is an continually evolving space.
SS: In general, I am very keen on technology and want to use it from the very start, but some of the buzz-words that I have seen really concern me. It worries me that some of these things are
mentioned like ‘lost job’ and all of a sudden that will pop a script, but hold on, he might be a 45-year-old executive who has just lost
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his job and been given a large pay-out, and he is starting another in a couple of weeks. Or he might be a guy working at British
Steel and the Chinese have not stepped in and bought it and he is really in difficulties because where else can he go, he has been in steel for 30 years. This is the bit where the technology can
really assist, but if you are not programming the right machine-learning and AI, then you will start to pigeon-hole and to ask questions that are not relevant.
What factors do you take into account which enables you to define potential and actual vulnerable customers? SC: As an industry we have spent many years trying to define what ‘vulnerable’ means and, pretty much everyone, all the time has the capacity to be vulnerable in some instances. There is a difference between being in
‘financial difficulty’ and being ‘vulnerable’. Being in financial difficulty certainly can cause vulnerability in the moment, but it is not necessarily a permanent state of affairs. If we are not careful, it is possible to
almost ”force” that person into being vulnerable by reinforcing that they are, when actually they might be in financial difficulty, which is very stressful and very difficult, but with the right support and treatment strategies to help them get through it, then the problem can often be addressed.
KB: On the other side you have people encouraging customers to make themselves bankrupt, saying that it is easy. There are people who are not financially astute and they can be taken advantage of. They have their own vulnerabilities in terms of their lack of knowledge about
January 2020
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