"Customers see I&E assessments as an attempt for debt collection businesses to extract more money"


The current income and expenditure process has unintended consequences, says 1st Credit UK managing director Eddie Nott.

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Our customers are surprised that we are keen to sit down and talk to them – and some confess they are initially suspicious that it may be a trap. Their reaction suggests face-to-face feedback is not a common approach for our industry to take.


However, detailed feedback is instrumental in ensuring our processes are as customer-friendly as possible. This happens in many ways, but one of the most significant is through independently-chaired customer focus groups.

It seems to be a positive experience for those who attend, with customers encouraging each other and swapping advice on credit rehabilitation.


“More debt companies ought to do stuff like this. It’s not fair that they are coming after you for money but don’t want to talk to you about it,” said one of the customers taking part in our latest session.


The exchange of information is two-way. Customers have many questions about the call centre team and their training, for example. They also have suggestions for improvements, each of which we take on board.


For customers it can be a revelation. “Having listened here, I’m getting more on the side of the credit companies because each one of us is totally different,” said one customer.


As well as information specific to 1st Credit, our customers tell us what they think about the industry in general. In our May customer focus group, one issue stood out above all others: The income and expenditure (I&E) process. All 10 of the customers who participated were extremely negative about the time taken to complete these assessments – describing them as stressful.


Far from being seen as a safeguard on affordability, customers see I&E assessments as an attempt on the part of the debt collection business to extract more money. They don’t differentiate between these calls and other reasons for contact, so they reported feeling hassled by the industry as a result.


“I worry about it. Are they trying to get more money out of me? Is it a trap?” said one. “My circumstances haven’t changed – I don’t want to do it again.”


Those on payment arrangements feel they have already been through everything needed and agreed to payments they can afford – they see repeated I&E requests and calls/letters as intrusive. At the very least they want to be able to tick a box that says nothing has changed. However, the group wanted the credit industry to find a better solution.


“If there are credit reference agencies I don’t understand why you have to give all these companies all the details. They have access to it,” said one.


In fact, nine out of 10 customers taking part in the session said they would be happy for I&E data to be shared. There is clearly a need for the industry and regulators to consider the unintended consequences of the I&E process. Designed to ensure customers are protected, it should not be compounding their distress.


By contrast, annual statements were universally popular and the group were keen to have access to their balance and payments digitally. The shift towards online communication taking place in the industry is important. We see evidence for this in the growing use of our online account management system.


Most of the customers we speak to have been though a long and stressful process of indebtedness and depression before tackling their financial difficulties. They are working themselves out of that situation and are looking for empathy from the industry as they do so.


It is easy to forget that customers don’t necessarily understand the workings of the credit management industry – some have fallen foul of inappropriate advice in the past and have been unsure where to turn.


It is heartening to hear that changes taking place in the industry are perceived by customers. “There was a feeling of intimidation ten years ago that has lessened,” said one. Another suggested that borrowers today would not get into the same level of difficulties they had experienced. “You can’t create the same level of debt you could have ten years ago,” she said. “Someone would step in.”


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