LSB has published the results of its review into how subscribers to the Lending Code and their agents handle customers in financial difficulties. The review focused first on affordability assessments, based on income and expenditure statements, that are required when offering repayment plans. The second issue considered was compliance with the May 2012 requirements on the use of debt collection agencies (DCAs). Among some of the breaches found, which merit follow-up work, are:
repayment plans proposed by DCAs that focused solely on obtaining an agreement to pay, rather than assessing the customer’s circumstances;
a DCA not offering information on available free money advice services;
- omission of the 30 days’ breathing space; and
- DCAs following a generic approach to collection, rather than having regard to the historic account information they have received or to previous payment plans agreed by the subscriber. On several occasions, DCAs did not transfer cases of vulnerable customers back to the subscriber’s specialist collections teams.