CRUNCHING NUMBERS
PRE-EMPTIVE PLANNING FOR THE CRISIS AHEAD

Lantern

Features | 21/06/22

I’ve written quite a lot recently about the cost of living crisis and how it’s set to impact consumers in general. It was also a common theme running across all the great sessions at the recent CCTA event, so I thought I’d cover some of the work we’re doing at Lantern to help our three million plus customers.

We’re not only committed to proactively helping customers navigate these tough times, but at Lantern we know that customers in collections can often be resilient. However, they still require our help and support, to ensure they remain on the road to being debt free.

As all outgoings are on the rise, we must ensure customers are taking these increases into account, even if they haven’t impacted them yet. It’s still fairly mild outside so heating isn’t being used as much, but we’re striving to ensure customers are considering those future impacts and making as much preparation as possible, ready for the colder months ahead.

We’re encouraging our agents to probe a little more than normal, albeit gently, to ensure that the customer has considered potential future expenditure. One of the areas we’ve reviewed is the last income and expenditure captured across a cohort of customers, to identify any changes (or lack thereof) relating to utility and fuel bills. This allows us to challenge a little more given that we’re all expecting some increase. If there’s been no change in the customers living environment, then we’ll interrogate the allowance they’ve set for food and fuel. For example, are they cutting back or are they not facing facts that the impact will happen? Our aim is to set sustainable plans to clear customers’ accounts over as short a period as possible, allowing the fact that everyday living is getting more expensive.

During our engagement with customers, we’re asking additional, quite direct, questions to make sure customers are not risking paying priority bills to accommodate paying down their accounts. A typical question might be “If you’re still able to afford this payment plan, what are you changing in your lifestyle to accommodate this?” It’s important that the answer to these types of questions are not that they are having to choose between either feeding or heating themselves or their families.

What is comforting, is that in many cases customers are making changes, such as cutting back on non-essentials, those daily coffees on the commute which soon add up (one customer we spoke to had realised she was saving £150 per month just by making her own!) Some customers are choosing not to eat out as often or they’re walking to destinations they would once have chosen to drive to.

One of the most heart-warming changes is where we’ve heard customers altering the activities they undertake with their children. Instead of a visit to the cinema or a theme park which can soon become very expensive, they’re going to parks or museums, still spending time together, but in many ways its more focussed time to chat and share experiences, and in most cases free!

These types of conversations are critical, not only to ensure that the plan remains sustainable and affordable, but that the customer is being realistic about the possible impact of these increasing prices to their lifestyle.

Another area discussed at the conference was the rise of illegal money lending, and how it’s our collective duty is to ensure customers never feel the need to source credit from these criminals. We’re listening carefully for signs that customers are even considering this source of borrowing. Establishing source of funds, as ‘friends’ today may not be real ‘friends’ tomorrow. We’re continuing to challenge the customer gently, and signpost to the support organisations available if we pick up on any cues or clues. The Illegal Money Lending team offered support in many guises, and I intend to take them up on that and encourage others to do so too.

It’s still very early to fully understand the true impact of this cost of living crisis and how it will affect our different customer cohorts. But what remains imperative is our proactive approach to offering support and appropriate signposting for advice, and most importantly listening to our customers and hearing what we can do to help.