It’s a win-win for mortgage forbearance with a tailored approach
Make the lives of your customers easier in stressful times while earning yourself a strong reputation.
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Many businesses have gone above and beyond to support their customers over the past eight months. From Nationwide announcing that no home will be repossessed until May 2021, to insurer Admiral giving its policyholders a stay-at-home refund of £25. With vocal praise from the press, consumer groups and charities alike, both these companies showed how anticipating customer needs and taking action before the customer requests it can play in your favour reputationally.
Your customers too will remember how they were treated during this time. They’ll remember how quick it was to find the information they needed, whether you offered a solution or perpetuated their problems, how easy it was to contact you and whether or not your staff listened with empathy along the way.
So, as the FCA’s updated finalised guidance comes into force on payment deferrals and tailored support, we look into how you can proactively make the lives of your customers easier in stressful times while earning yourself a strong reputation (and customer loyalty).
There’s no one-size-fits-all approach
Being flexible and offering tailored solutions is the key to minimising distress for customers. A full range of short and long term forbearance options will give your staff options to match different circumstances.
Where forbearance arrangements are already in place, regularly review customer’s arrangements to ensure that their circumstances have not changed and the support remains appropriate.
But doing right by customers doesn’t always mean providing continued breathing space periods. For those customers who were already in financial difficulty before the pandemic, or whose situation doesn’t seem likely to change at the end of the 6 month deferral period, it’s time to present them with alternatives that can get them out of perpetual debt. Capitalising the loan, an alternative product, encouraging property selling, receiving equity and downsizing may be in the best long-term interests of the customer.
Often staff feeling empowered to act with flexibility comes down to your policies and procedures. We suggest reviewing them now to ensure they are not too restrictive but instead guide your staff to do what’s right for the customer in the moment – analysing the customers overall indebtedness and promoting tailored solutions.
Top tip: sometimes internal priorities can conflict. Partner with a trusted expert to independently assure your policies and processes, so you know you’re on the right track
Keep communication open
More often than not, the distress and anxiety of a customer in financial difficulty – or any form of vulnerability – can be eased through a conversation. It’s best to contact customers in good time before the end of a payment deferral period informing them of how to access further support if needed before missing a payment. Some customers might be shocked to discover they may be paying more over the lifetime of the mortgage if the term is extended, so take the time to explain this as well.
Think about the way in which you communicate – some customers are turned off by forms, others find it difficult to interact online, whereas others prefer online channels. This may be the first time they’ve been in this type of situation. How customers were communicated with during these times will become even more relevant in enforcement cases going forward.
Upskill your staff
Supporting your customers during this difficult time invariably comes down to empathy. Your customer support teams are uniquely placed to bring stability to a customer’s chaotic world. The key is listening, looking at the customer circumstances holistically and reaching an appropriate, tailored solution. It’s more than likely that these customers will have other priority debts, so your staff should be encouraging them to speak to their other creditors and make them aware of the support provided by money and debt advice organisations and, if possible, offer to transfer the call.
Many of your customers in financial difficulty may be vulnerable due to their financial resilience but that might not be the only thing they are struggling with. Invest in training to give your staff the soft skills needed to identify vulnerability and be fully aware of the practical steps they should taking.
At the end of the day, customers remember how they’ve been treated and are more than happy to talk about their experiences – particularly the bad ones. Treating your customers as the humans they are by being sympathetic, recognising their unique challenges and circumstances and offering flexible and tailored options will make your business memorable – in a good way.
Whether you need to upskill your existing team or scale up resource to meet increased demand, we can help. Our experts can run workshops to get your team up to speed, or provide ready-trained contractors at the push of the button.