The Finance & Leasing Association has released a debt collection guide with the UK Cards Association to help members identify and support vulnerable customers.
Working in partnership with the University of Bristol’s Personal Finance Research Centre, the trade bodies published a 21 step guide in helping different kinds of customers called ‘Vulnerability; a guide for debt collection’.
Issues talked about include serious or terminal illness, mental health, addiction and bereavement.
Stephen Sklaroff, director general of the FLA, said: “The project has found and described best practice across the credit markets, and the guide suggests a number of practical ways in which staff can identify and cope effectively with often challenging situations.
“Vulnerability: a guide for debt collection will be a great resource for firms in the credit industry, and will benefit customers by helping ensure prompt and practical help when they need it most.”
Graham Peacop, chief executive at The UK Cards Association, said: “We are never complacent and this new research will enable our members to continue to develop the support they provide to their staff and to vulnerable customers.”
The publication includes case studies about what lenders and other institutions are already doing to help customers.
In one case a Barclays mortgage holder who was diagnosed with Relapsing Remitting Multiple Sclerosis resigned from a highly paid job to take a less stressful job with a much lower income.
This meant her mortgage was unaffordable and she fell into arrears, while due to the long-term nature of her condition a short-term reduced payment arrangement would have been unsuitable.
The case was discussed by a weekly Barclays review panel, where senior management as well as colleagues from credit risk, legal, compliance and product meet to help such customers.
The panel reduced the interest rate, converted her repayment mortgage to interest-only permanently and added the arrears onto the loan so she could cover the interest payments and make a small capital reduction every month.