| | Debt Collection Services

Human collections approaches to support vulnerable customers

Recent research by the FCA indicated that around half of adults in the UK are in potentially vulnerable circumstances.

That was before the Covid-19 pandemic hit the population with isolation; interruptions and reductions in income; troubling increases in domestic abuse; suicide attempts and decreased access to medical care.

When you’re looking at indebted customers, it stands to reason that the proportion of customers in potentially vulnerable circumstances will be significantly higher. Indeed just the relationship between debt and mental health as a single driver of consumer vulnerability is enough to make this a near certainty.

Collections management is, therefore, first and foremost, an exercise in communicating with and assisting vulnerable customers.

True, not every customer will be vulnerable. But a lot will be, and even where this vulnerability is not yet materialising, a large population of customers on the brink of becoming vulnerable still requires careful management.

Customers who are not vulnerable are more of an exception than a rule.

So how best can firms in our sector, or in the collections departments of originating creditors, embrace their vulnerable customer base in order to assist them in finding mutually beneficial arrangements?

Considerable work has been done in this area, however the following themes may prove useful when designing processes and communications:

1. Remember that the easiest thing for a customer to do is to disengage
2. Design for vulnerability rather than presuming non-vulnerability
3. Remember they don’t want to tell you what’s wrong
4. Work on your communication skills, specifically listening, then do it some more, and then some more again
5. Make things happen

Let’s take a look at these in a little more detail:

1. Remember that the easiest thing for a customer to do is to disengage
This is the simplest and frequently deployed coping mechanism for stressful situations regarding debt. Stop opening the post and stop answering the phone. If you answer the phone to a debt collector by accident, hang up. These are not the actions of someone who is somehow fundamentally dishonest and seeking to evade you, they are the actions of someone who can’t face talking to you. Additionally, during the current pandemic most of your customers will have far more important things to worry about than their debts, so establishing contact is more challenging than ever.

Ensure that you reach out to customers in a number of different ways, and that your initial approach stands out in its warmth, approachability and understanding, and you might have a better chance of preventing this. Referencing the Credit Services Association’s #HereToHelp campaign within your written communications may prove reassuring for your customer’s before they establish contact.

Your second or third approach is too late – if you don’t get the first one right you’ll have lost them already.
Also, remember the first thing they’re likely to do is Google your company name. Make sure that your website makes it clear that you’re here to help, that you understand the factors that can make payment difficult, and that you aren’t the kind of debt collector they’re worried you might be. This will make it much easier for customers to engage
Also remember that the human-to-human interface is emotionally loaded, and that this may be too much for some customers to deal with for a number of reasons (shame, fear, lack of confidence and so on) – ensure that you use modern technology to provide them with self-service solutions and that you keep contact attempts to a minimum to avoid giving the impression you’re ‘chasing’ them.

2. Design for vulnerability rather than presuming non-vulnerability
To presume that most of your customers are your ‘ideal’ customers with stable employment, no health problems, around middle age, financially under-burdened and walk with a spring in their step is factually incorrect.
The statistics underlie what those of us with experience in the industry have felt for a long time; that the majority of our customers are vulnerable or potentially vulnerable to a greater or lesser extent, rather than this being a “vulnerable” vs “not vulnerable” dichotomy. It is more useful to imagine vulnerability as a spectrum ranging from not very vulnerable at all through to extremely vulnerable – all of our customers (and everyone else too) is somewhere on that spectrum, and very few are at the extreme ends – we are all somewhat vulnerable, and ascertaining the degree and type of your customers’ vulnerability is critical to ensuring that your solutions work for them.

3. Remember they don’t want to tell you what’s wrong
If you have access to the right kind of MI, see how many of your customers have actually disclosed vulnerability or potentially vulnerable circumstances. If you can, try to filter this out based on dates – look at 2019’s figures. I bet it’s nowhere near as many as you might expect. Indeed I bet it’s nowhere near the 50% baseline identified by the FCA’s Financial Lives Survey (2017).

Why is that?
It’s not because you miraculously only have customers with a very low level vulnerability.
If they haven’t told you it’s because they don’t want to.

At the moment, with everyone experiencing a certain degree of vulnerability due to massive global events which are in the news constantly this may be easier than usual, but under normal circumstances (and for a lot of people this will still be the case in the current circumstances) these conversations are deeply personal, frequently distressing or linked to negative, self-judging emotions like guilt and shame. Disclosure is the most difficult part of this process for your customers.

Use every opportunity you can to explore customer life circumstances and make sure your staff are projecting kindness and curiosity about their customers. If they believe that someone really wants to know what’s going on because they care and want to help, disclosure will become a lot easier.

4. Work on your communications skills, specifically listening, then do it some more, and then do it some more again
The reason communications skills are a perennial fixture in contact centre training programmes is because there is always a need for it and always room for enhancing these vital skills.

These skills absolutely make the difference between disclosure and non-disclosure, connectedness and disengagement and positive or negative outcomes.

Don’t make excuses for your staff like “Oh, that’s Barry. He just sounds that way. He can’t help it.” We all have absolute control over how we sound, including our clarity of speech, pitch, tone, pace and the overall impression that we give on the telephone. We should ensure that we train our staff repeatedly on improving their communication skills, and that it is understood that nobody is perfect and this is therefore something everyone needs to be working on improving all the time.

Never forget that the most important and most difficult communication skill is listening. You have two ears and one mouth, so listen twice as much as you speak, lead from the front by listening to your staff and ensure that any communications skills training includes generous amounts of content and time focusing on improving listening.

5. Make things happen
Anyone with time, intellect and motivation, can write a brilliant set of policies, procedures, training documents (or blogs!) about consumer vulnerability, however in isolation this process is futile. This has to be translated into meaningful improvements in the experience of potentially vulnerable consumers, and that requires the continuous concerted effort of the whole organisation to make it happen.

Arvato’s approach
At Arvato we have many years of experience of working with consumer vulnerability and are consistently honing our approach through engaging in new research, the development of our practices, and the training and then re-training of our staff.

We recognise that this is an area where the industry is constantly learning more, and where we as an organisation and individuals are learning more as well. This means we don’t rest on our laurels and are constantly improving our approach.

To find out how we could help you manage your vulnerable customers, please get in touch.

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