We spotted a story this week that outlined the Financial Conduct Authority’s (FCA) probe into how firms deal with early arrears management, as the FCA feel this is a crucial part of the debt collection process.
The probe is focussing mainly on unsecured lenders and the FCA hopes that by looking into the early stages of arrears management it will ultimately help debtors get the correct advice and help at the crucial early stage of initial arrears.
The FCA wants to make sure all firms involved in the recovery of debt are following the guidelines set out by the regulator. It also wants to make sure that customers are being treated with fairness and that a level of forbearance is being used when appropriate.
First time arrears
How a customer is treated when they first run into arrears is a vital testing ground for the regulator. Trade bodies and other debt collection related agencies are watching the probe with interest. Here at Commercial Domestic Investigations we make sure that those with genuine financial difficulties are given the correct advice about what agencies to seek help and advice from.
A spokesperson for the FCA explained: “A firm’s early arrears approach often establishes the tone of its relationship with customers and sets the customer on a particular path.”
What the probe will do
The work by the FCA will involve reviewing the policy and procedures of firms, some on-site observation and interviews will also be undertaken by staff at the FCA. The probe will follow three distinct phases: phase one will involve a review of sector strategies. Phase two will look at customer file reviews and phase three will provide feedback and ask firms to take action where changes to processes are needed.
The probe will look at unsecured lending such as credit cards, personal loans and some retail finance, and it follows on from a review of the payday loan industry.
For more information on debt collection services please contact Commercial Domestic Investigations. To keep up with the latest debt collection news remember to follow Commercial Domestic Investigations on Twitter.
About Commercial Domestic Investigations
Commercial Domestic Investigations are regarded within the debt collection and credit control industry as one of the best credit management companies in the UK. Established in 1988 to support and service all sizes of companies in the field of Credit Management.
Primarily our clients use our automated Debt Collection Services, but over the last eighteen years clients requirements have changed dramatically, something Commercial Domestic Investigations has addressed.
We now boast a national client base in excess of 30,000 companies. Commercial Domestic Investigations has grown by listening to clients’ requirements and adapting our services to meet all companies’ needs from Sole Traders, SMES, Ltd and Plcs. Please contact us on 08444 159200 for more information.