“Arrears handling at many lenders is too one dimensional and doesn’t take account of borrowers’ individual circumstances. The danger is that if a particular case doesn’t fit into a box, it tends to get pushed into litigation as a default. Lenders need to use more highly skilled counsellors who are empowered to take commercial decisions that can help reach agreements which are bespoke.”
“The benefit of getting a full picture of customers’ financial circumstances at the earliest possible opportunity maximises the chance of reaching a satisfactory solution.”
“The temptation is to take a short term view on a 25 year contract - where the ‘balance of power’ between lender and borrower may shift over the term of the loan. What should be borne in mind by lenders is that the aim should be to gets its money back in full, with all interest and charges, by the end of the term. Some lenders’ collection policy fly in the face of this. A customer who is otherwise financially strong may be disadvantaged through having minor arrears when lenders need to take a longer term view.”
“The message for lenders is clear - there is an absolute need for high quality, early interventions within a framework which allows for bespoke solutions to be negotiated.”
