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The Credit Services Association (CSA)
Blog: Opening new doors: The future of customer service-led doorstep debt collection
John Ricketts is vice president of the Credit Services Association and has been a member of the Institute of Credit Management since 1987. He is a senior debt collection executive with over 20 years CEO and Sales Director Board Level experience.
Doorstep debt collection has long divided opinion. Clients have often struggled with the concept of collecting money on the doorstep, despite its proven success as one part of a wider collections strategy. Public perception of bailiffs and the new challenges of compliance, have combined to make it too ‘high risk’ for many creditors, despite the fact that it has been proven to be an effective collection strategy with positive customer outcomes.
What is the role of a doorstep collector?
Contrary to the caricatured stereotypical image of somone bursting into people’s homes to remove TVs and other possessions, the main skill-set of a Doorstep Field Force, and the individual Field Agents/Authorised Representatives (‘agents’), is their ability to create a dialogue with a customer where no such dialogue previously exists. So is there a new, more contemporary vision for doorstep in a modern collections environment?
What if, for example, a new role for the agents could be found – in effect ‘re-connecting’ with customers regarding outstanding residential and business debts? Extending this idea further, could that same Field Force not adapt their skills to assist in other areas of client and customer service? If representing utility companies, for example, agents can logically assist with residential and business disconnections, safety inspections, and revenue protection – specifically the timely identification of unpaid gas or electricity services. They may also be able to assist in a broader ‘customer services’ role, providing support with meter readings, or simply checking if a premises is occupied or vacant. For the banks and other financial institutions, ‘re-connecting’ at an early stage with customers who have gone into arrears is a potential market opportunity, as is the ability to take a ‘statement of means’ for those looking to secure a new mortgage or loan.
Agents can also play a role in pre-repossession visits and providing support in terms of taking on new accounts or solving disputes with existing customers. And for the insurance industry, locos reporting, taking witness statements and general support with accident investigation are just some of the added-value services a Field Force can viably undertake. The scope of operations is considerable; evolve into these markets and the roles will evolve accordingly.
How has the new regulatory regime changed field collections?
Since the Financial Conduct Authority (FCA) took over as regulator, collections agencies have been nothing if not inventive. Whereas the emergence of a new regulatory regime may have served to put certain firms (and collectors) out of business, some have shown a more entrepreneurial spirit.
Fieldcall, for example, is one such firm that has risen to the challenge as group managing director Andy Fowler explains: “The field visit market has consolidated into a handful of credible, regulated, professionally managed and modern businesses that are no longer rewarded for the money they collect (in fact most no longer collect money) but for the information they supply,” he says. “As a result of this our businesses no longer specialise purely in financial services but have diversified and developed into a provider of services to the insurance industry, insolvency practitioners and landlords.” Key to enabling Fieldcall to rise to this challenge has been its use of technology: “All our agents utilise an iPad that has full end-user security with real time updates available to clients,” he continues. “It would have been inconceivable five years ago that major insurance companies would use the same company to visit in respect of a leaking shower claim who also visit individuals who are in arrears with their personal loan or mortgage but that is exactly what is happening. This is because the visit is undertaken in a professional and focussed manner with an emphasis on gathering information and able to provide that information in a way that enables the correct outcome to be delivered for the customer and is also able to do all of this using secure state of the art technology, without paper.”
Does doorstep collection still pose a reputational risk?
Andy argues that there is no longer any reputational risk associated with a field visit, in fact quite the opposite: “Over 98% of the people who we meet respond in a positive way to the experience,” he says. “And astonishingly, in the case of borrowers who are in payment difficulties, the earlier in the process the visit occurs the better the experience for the consumer as uncertainty is minimised.”
EOS Solutions UK is another firm that saw the arrival of a new regulator as an opportunity rather than a threat: “A core part of our preparations for FCA authorisation was the decision that we had to make regarding our field services offering,” explains Stuart Knock, managing director of EOS. “Our existing field service clients were exclusively utility businesses and so we did not need authorisation to maintain our field income. Our decision to seek FCA authorisation to act as a principal might therefore seem a little adventurous but this was linked to the Dator app that was then still in development which we saw as being a revolutionary concept and something unique to EOS. We knew the app would allow us to reskill our agents and improve their productivity by significant multiples, in turn improving our competitiveness. This we thought would open up new markets for our services, including the regulated sectors.”
For Stuart, reskilling field collectors and agents at a time when the focus on compliance was rising exponentially seemed an obvious step to take: “We had already decided that limiting interaction with the customer at the door would reduce risk and enhance audit control,” he says. “We made our intentions to the FCA clear from the outset, both in our business plan submission and the detailed follow-up questions that followed.” The field agent collects a new contact number from the customer, relays that in real time to a dialler and then moves on to the next visit: “The call opening with the customer contains an audit on the quality of the field agent’s interaction and we then conduct a full TCF conversation with the customer - all on a recorded call.”
How are we professionalising field collection with technology and innovation?
Stuart continues: “We undertake affordability assessments, recommend any assistance and agree repayment plans with the customer in the safety of their own home without the possibility of them being overheard by neighbours.” EOS Solutions calls this service On Demand Customer Contact: “The request to launch a call can be routed to our client’s in-house contact centre if desired so that they can directly re-establish a relationship with their customer,” Stuart explains.
Technology and innovation is similarly important to the team at FieldCall. Having committed to the FCA authorisation process, Andy put a dedicated resource in place to ensure his firm met all of the necessary regulatory requirements. It appears to be paying off: “This year my businesses will visit over 150,000 people; contrast that to three years ago when the number would have been closer to 30,000 and you can see how far the sector has come.”
Perhaps the ‘old style’ doorstep collections model is dead but a new ‘vision’ is ensuring that relevant skills are very much kept alive – for the benefit of both clients and customers.