Blog: Good practice creditor toolkit on working collaboratively with debt advice agencies
25 July 2017
Leigh Berkley is former President and current Board Director of the Credit Services Association (CSA), Board Director of the Money Advice Liaison Group (MALG), Vice President of the Federation of European National Collection Associations (FENCA) and Director of External Affairs & Development at Arrow Global.
On 5 July 2017, the Money Advice Service (MAS) launched its new good practice creditor toolkit on working collaboratively with debt advice agencies. Having been involved in its development through various workshops, the Debt Advisory Operations Group (DAOG) and providing a case study on how Arrow Global works with a range of debt advice agencies for the toolkit, I was pleased to be asked to help launch it on behalf of the creditor community.
There is a large body of evidence which shows that, like the financial services and collections industry have done for years, working in close partnership with the debt advice sector tends to achieve fairer outcomes, better customer engagement and sustainable payments - providing a win-win for all involved. However, currently there are varying practices across other creditors when it comes to recognising, assessing, and reviewing their customers’ need for free debt advice.
There is an awful lot of advice out there on how creditors need to deal with the debt advice sector, but this new toolkit is based on a really practical, operational, pragmatic and collaborative exercise involving a wide range of practitioners and stakeholders which ensures that the guidance is relevant and will have a real impact. The best practice processes and case studies in the toolkit provide a flexible framework for different types of creditors, and because it is full of real world insight, the toolkit gives creditors the opportunity to look in detail at their operation and really challenge themselves on what they are currently doing.
I would highly recommend reading the toolkit in full, but in summary, the seven areas where creditors can collaborate better with the debt advice sector to support their customers are:
1. Debt advice interventions – creditors should track the benefits debt advice brings to customers as well as their ability to collect arrears payments.
2. Customer affordability – creditors should apply the Standard Financial Statement (SFS) spending guidelines or equivalent industry guidance when agreeing affordable repayments.
3. Debt advice referral strategies – creditors can use this toolkit to review all customer channels and help appropriate customers to easily access independent debt advice.
4. Creditor oversight of referral partners – creditors want to have oversight of what happens to customers post debt advice referral. Use this toolkit to agree an approach with debt advice referral partners.
5. Engagement & partnerships – creditors have day-to-day contact with debt advice agencies. MAS provides guidance on getting the most from the relationship.
6. Target specific customer cohorts for debt advice intervention – some examples and case studies of innovative partnership working with debt advice agencies.
7. Align to the Money Advice Service ‘supportive creditor standards’ – the difference between ‘Minimum standards’, ‘Good practice support’ and ‘Going above and beyond’ are summarised.
With the Arrow Global Debt Britain report forecasting further rises in unmanageable household debt by 2020, I hope the toolkit will enable creditors including local and central government, utilities and landlords to fully embrace the benefits of working collaboratively with debt advice agencies, and to streamline the customer journey to provide better outcomes for all involved.
Part of the CSA’s role is to bring together creditors, collections professionals and advisers, in order to showcase the high standards already being achieved by our members, and we look forward to doing that again this year at the UK Credit & Collections Conference on 14 September 2017.