BACK TO THE DRAWING BOARD?
EMBRACING CHANGE IN A CONSUMER DUTY FOCUSED INDUSTRY

LANTERN GROUP

In recent weeks, the FCA joined forces with UK Regulators Network (UKRN) issuing statements around debt collection activity. This ‘activity’ relates to all forms of communication to customers in arrears, be it from lenders, creditors or their chosen third party outsourcers.

At a time when the cost of living crisis is biting hard, this is likely to go hand in hand with the ongoing campaign spearheaded by Martin Lewis, in relation to placing a cap on the number of communications allowed to be sent to a customer in any given week, including reminders and regulatory notices.

This is a rule already in place in other countries. Imagine yourself as a customer with multiple debts, being contacted by multiple creditors, multiple times a week and it’s easy to see why this has been raised, and indeed where it’s heading.

In essence what this means, under the umbrella of the Consumer Duty, is that messaging to customers must be fair, transparent and not misleading. This practice, when undertaken in the correct manner and within the spirit of Consumer Duty can actually enable a company to control costs, whilst improving the overall customer journey.

It’s about reviewing every single communication and making sure it offers assistance along the way, encouraging customers to engage. Seven years ago, the FCA focused on the business I had joined to understand the market better, and imposed this similar rule. I can recall feeling how unfair that was when competitors were continuing under the old regime.

I make it sound simple. It wasn’t. It was painstaking and an absolute commitment was required, however we were repaid ten fold.

However, having agreed to abide by the requirement, we found over time that our bottom line improved alongside increasing our brand and reputation. I make it sound simple. It wasn’t. It was painstaking and absolute commitment was required, however we were repaid tenfold.

Changing our CRM system was possibly the biggest and toughest part of the process, as we had to create a Single Customer View to ensure we complied with the new requirement, but looking back it was by far the best move we made. We also reviewed all our processes and communications and adapted them to fit our new system.

Following that, we asked our partners to do the same. Anything is possible, but it takes commitment to undertake a thorough review and execute a plan to achieve a great outcome. I cannot stress enough how starting with a review of your systems is key to getting this right.

To review your operation effectively to allow this (expected) change to work, it’s wise to look to your Consumer Duty Champion (independent of shareholders and management) who Is experienced and well versed on looking at this subjectively, as this will assist the business in become a shining star, raising brand, profits and ensuring customer delight.