FREE IMPARTIAL SUPPORT WHEN THINGS GO WRONG.

Transcription

1 LEAD STORY FREE IMPARTIAL SUPPORT WHEN THINGS GO WRONG. What the Financial Ombudsman Service (FOS) can do for you and your clients. AUTUMN 2013 ISSUE 6 A Newsletter for Debt Advisors Sharing our knowledge. Supporting our industry. UK Asset Resolution Limited (UKAR) is the holding company of Northern Rock (Asset Management) plc (NRAM) and Bradford & Bingley plc (B&B) which includes Mortgage Express. Visit

2 SERVICE EFFICIENTLY. 3 DELIVERING GREAT With UKAR s Customer Operations Director, Erica Swales. 4 A FAIRER WAY TO PAY? Introducing The Sustainable Debt Advice Project s, with AdviceUK's Andrew Hull. 6 FREE IMPARTIAL SUPPORT AUTUMN 2013 WHEN THINGS GO WRONG. Making the most of the Financial Ombudsman Service with Stuart McFadden. ISSUE 6 This material is directed at Debt Advisors in the UK who support mortgage customers of NRAM, Bradford & Bingley and Mortgage Express. This should not be shown directly to customers. Calls may be monitored or recorded & 0845 numbers may be charged at a higher rate than local and national calls and will vary between different providers. Check with your provider. UK Asset Resolution Limited. Registered Office: Croft Road, Crossflatts, Bingley, West Yorkshire, BD16 2UA. Registered in England & Wales (Company No ). Please note that UK Asset Resolution Limited is not authorised or regulated by the Financial Conduct Authority. Northern Rock (Asset Management) plc, Bradford & Bingley plc and Mortgage Express are part of the UK Asset Resolution Limited group. INTO A STREAM. 8 TURNING A TRICKLE Maximising income with Auriga Services Debt Manager, Aadal Shafiq. A NEW APPROACH. 10 EQUITY RELEASE ADVICE LANDSCAPE. 13 MAPPING THE DEBT StepChange Debt Charity s Financial Advice Manager, Tom Moloney explains all. With the Improvement Service s Sandra Sankey. 15 MEET THE STRATEGY TEAM. Richard Smith, UKAR Customer Assistance Strategy Manager. 3 DELIVERING GREAT SERVICE EFFICIENTLY. Maximising value for taxpayers with UKAR's Customer Operations Director, Erica Swales. Putting our customers and their situations at the heart of what we do is extremely important to us at UKAR. Erica Swales, UKAR. Although there are welcome signs that a modest recovery in the economy is emerging, the pace of growth remains weak. This is continuing to put pressure on household finances and many people are still struggling to pay their household bills. Putting our customers and their situations at the heart of what we do is extremely important to us at UKAR, so that is why we are constantly reaching out to our customers who may be in financial difficulty or are showing early signs of struggling to balance their household budgets. Although more than 92% of our customers are up to date with their mortgage payments and less than 20,000 are more than three months in arrears, our customer engagement strategy focuses on supporting and working with those customers who are in difficulty. We aim to find the most appropriate outcome for their particular situation, assessing affordability and referring customers, where appropriate, to free independent debt advice. To be successful we continue to strive to improve the service and interaction with our customers. We have recently launched our 'One Touch Call' approach within Customer Operations, enabling our colleagues to deal with a wider range of customer queries at the first point of contact. We have also recently mailed nearly 19,000 customers who have an interest only mortgage maturing in the next ten years, reminding them of their obligations and explaining how we can help. The message has been positively received - nearly half of all customers have responded to share their repayment plans with us. The majority we have spoken to have also agreed to join our interest only review programme and will stay in regular contact in the future. Colleagues throughout Customer Operations are encouraged to reflect on not only their team's performance but also their own contribution to delivering great customer service. Through our daily 'One Huddles', every colleague is kept updated on the latest developments that will help them serve customers better. We actively seek out feedback from customers in relation to their own experiences when dealing with UKAR and we use this to inform our future approach. By continuing to deliver appropriate customer outcomes and supporting those customers who experience financial difficulty, we go a long way to ensuring that UKAR achieves our overall mission of maximising value for the taxpayer. We focus on supporting and working with those customers who are in difficulty. AUTUMN 2013 UKAR ARENA 3

3 4 A FAIRER WAY TO PAY? The Sustainable Debt Advice Project. It was designed to trial new ways of creating funding and distributing payments in the free-to-client sector. Now, six months on, the lessons learned from AdviceUK s initial Sustainable Debt Advice Project pilot are being applied to the launch of a second phase. Here, project leader Andrew Hull, outlines the aims and findings of the original trial and explains how he hopes they ll be used to create more efficient and beneficial ways of working in future. He says: We first started discussing ideas for the project in 2010 when the UK was coming out of recession and government spending cuts were on their way, increasing future demand for debt advisory services. "The main drivers were finding ways to generate more funding for the free-to-client sector and helping clients who wanted to make token payments where the amount they were paying would be considered too low for an IVA or DMP. With the help of funding from Friends Provident Foundation the pilot launched in April 2012, running for almost 12 months in nine agencies across the UK (a combination of larger and smaller organisations, providing advice face-toface or over the phone). It implemented changes in several key areas. We worked with PayPlan to set up a system of electronic referrals to streamline processing for clients setting up IVAs or DMPs. A majority also felt the advice they received was fair. Andrew Hull, AdviceUK. Payment distribution was another strategy allowing clients to pay several creditors via one standing order. We also explored whether some of the Fairshare contributions could be channelled back into advice agencies, providing a new source of funding. The pilot was independently evaluated by Public Perspectives and the results have been largely positive providing scope for future development. Client response was especially good. Eighty-nine percent said they felt more in control of their finances and less stressed after contact, while 97 percent were committed to a repayment plan. A large majority also felt the advice they received was fair. The only thing we were slightly disappointed about was the relatively low number of people entering into repayment agreements. Out of 11,000 customers, 162 entered into a DMP or IVA, for help dealing with 3.1 million of debt. A further 380, with 2.9 million of debt, set up disbursement plans. The numbers represent just five per cent of clients seen something we would hope to improve in future. Another area where we would want to see more development is in the technology used we d like to see more integrated, efficient systems, to make sure any new model doesn t increase workloads. In terms of financial viability this kind of system could provide a useful extra level of funding but we would need to see more evidence to justify substantial investment and a full rollout. Overall though it was felt that the benefits for clients were hugely important so, in September, we launched a second pilot phase. By early 2014 we hope to be working with up to 25 agencies. We re currently inviting interested parties to join the project and find out more about how it could improve their efficiency and outcomes so if you want to be involved please do get in touch. Find out more about the project and its evaluation at adviceuk.org.uk/sustainabledebt-advice-project To sign up for the next phase of the scheme contact Andrew Hull on or andrew.hull@adviceuk.org 89% said they felt more in control of their finances and less stressed after contact. 97% committed to a repayment plan. Source: Public Perspectives 4 AUTUMN 2013 UKAR ARENA 5

4 6 FREE IMPARTIAL SUPPORT WHEN THINGS GO WRONG. Making the most of the Financial Ombudsman Service. Making sure clients receive the very best support is something we all work hard to achieve. But what happens when it doesn t meet the expected standard? What part can you and other agencies play in helping clients when things go wrong? The Financial Ombudsman Service (FOS) provides free-toconsumers support for a wide range of complaints against financial services organisations, including people experiencing financial hardship. Although the body is well established, debt advisors are not always aware of how simple it is to use or how its work can support wider debt advice provision. Here Outreach Officer, Stuart McFadden, explains the processes and offers practical tips for those advising clients. He says: We re a free, unbiased service that is all about guaranteeing standards for everyone. In the past we ve suffered from a lack of awareness about how easy we are to use so we re keen to put that right. We know there can also be a reluctance to bring complaints when people are in debt and stressed they might not want to or worry it will be a long process which it isn t usually. They may also believe they are in the wrong because they owe money but all customers have the right to be dealt with sympathetically. We know advisors time is precious but making a complaint is easy and doesn t have to be backed up with legal argument or regulator guidance the client just has to say why they are unhappy. Our Technical Advice Line offers immediate guidance too you can call to find out if we can look at a client s problem. if necessary we can order lenders to put things right. Stuart McFadden, FOS. TIPS 1 Keep it simple Tell us what happened in the consumer s own words rather than getting bogged down in regulators guidance or the legal position. 2 Don t sit on it If you have had the business final response it s unlikely to change its mind. The worst case scenario is that your client may miss the time limit in which they can bring a case to us. 3 Ask does the consumer need representation? There is an option on our complaint form for someone else to bring the complaint on their behalf. If your name is in this section you will be the main correspondent. 4 Use the technical advice desk If you are unsure, give us a call on Last year we received more than 2.2 million enquiries and around 500,000 new cases. Typical scenarios include clients with a DMP in place but still having charges applied, or clients being called repeatedly by collection agents. Often we help clients resolve things before adjudication sometimes just a letter will get things moving in the right direction. When a complaint is made, the business has eight weeks to respond. Often that is enough to resolve things. If not, it becomes a case. We re not consumer champions; we take an impartial view. If the complainant accepts the Ombudsman s decision then it is legally binding - if necessary we can order lenders to put things right. To increase awareness of our service, we now offer free UK-wide training courses. If you are interested please do drop us a line to find out how we can help. For instant advice about individual cases contact our Advice Line on or technical.advice@financialombudsman.org.uk 6 AUTUMN 2013 UKAR ARENA 7

5 8 TURNING A TRICKLE INTO A STREAM. With Auriga Services. Auriga specialises in looking after assistance funds on behalf of some of the UK s biggest utility companies." Aadal Shafiq, Auriga. Helping clients maximise income has always been a priority for grant management organisation Auriga Services. Auriga specialises in looking after charitable trusts and assistance funds on behalf of some of the UK s biggest utility companies, including Severn Trent, United Utilities and Thames Water. It has recently widened the scope of its support by offering a designated telephone-based Debt Advice Service using its expertise and customer contact to provide tailored financial help to those in crisis. Debt Manager, Aadal Shafiq, explains how it works and outlines why closer working with the debt advice industry is going to be key to the organisation s future success. He says: Customer support is at the heart of what we do. Auriga currently handles some 90,000 customer contacts each year, (calls, s and letters) and assesses around 33,000 annual requests for hardship applications; providing around 200,000 in grant aid every week. Even when we can t give direct financial help we will try and make a referral for wider support. We set up our designated Debt Advice service last year. We use the engagement we have with clients when they come to us for help with other things, most commonly water bill arrears, and take a wider look at their finances to help them get back onto their feet. We ll negotiate with priority and non-priority creditors, provide support working with the organisations that refer their customers to us for debt advice and complete Debt Relief Orders or look at bankruptcy where appropriate. We can help customers obtain any extra benefits they are entitled to, if necessary taking them to appeal stage. In the 85% of those we ve seen took action and achieved a positive outcome. last 12 months and taking a sample of just 21 cases, we ve helped clients access 44,000 in benefits and have 22,000 of debt written off. We ve also dealt with another 95,000 of priority and 325,000 of non-priority debts for customers. It means that 85 per cent of those we ve seen took action and achieved a positive outcome. Now we re looking to build on that to create closer partnerships with banks, lenders, housing associations and debt advice providers, ensuring we can offer the best support possible. As part of our wider role, we also publish a quarterly Utility Schemes Booklet for debt advisors; a comprehensive list of up-to-date sources of funding and relevant contacts. Details can change very quickly so we have a designated member of staff to review and manage this and we hope it will be a useful resource for advisors looking to help clients access funding." Printed copies can be made available but it can also be downloaded, for free, via our website aurigaservices.co.uk CASE STUDY A client came to us for help with water bill arrears but thanks to our Auriga Debt Advice service we were able to offer wider support ultimately helping to avoid her home being repossessed. The customer was a single mum on Job Seekers Allowance, who had fallen a few months behind with bills and mortgage payments and a court date was set for repossession. After accessing a trust fund grant to help clear water bills, we completed a benefits check for the client resulting in a higher entitlement to Support for Mortgage Interest. We produced a workable budget for the client and spoke to her lender to negotiate a fixed-term six month switch to an interest-only mortgage. This gave her extra income so she could start paying the arrears and planning for the future. 8 AUTUMN 2013 UKAR ARENA 9

6 10 EQUITY RELEASE A NEW APPROACH. With StepChange Debt Charity. They ve not always enjoyed the best reputation, but managed correctly, modern equity release schemes are playing an increasingly positive part in debt management. This is especially the case for older clients or those coming to the end of interest only mortgages. So much so that StepChange Debt Charity has now created its own mortgage team; encouraging people to consider schemes and offering impartial, free advice. The only UK charity providing this service it s part of their wider commitment to provide tailored, long-term financial solutions. They launched StepChange Financial Solutions six months ago, working with high street lenders to develop new retirement products. Here Financial Advice Manager, Tom Moloney, outlines their aims and the potential benefits for clients. an interest only product. Instead of lifetime mortgages we re looking at shorter terms, say five years, with fixed rates of around 4.75 per cent and we re trying to encourage providers to launch a ten-year option too. We ve partnered with Hodge Lifetime to create The Retirement Mortgage which we feel will benefit clients with a competitive five-year rate with a lifetime term. We also offer Interest-Only Lifetime Mortgages, Lifetime Roll Up Mortgages and Home Reversion Plans. Interest servicing mortgages have surged in popularity as clients acknowledge the savings achieved through managing the interest. With Roll Ups interest increasing over time, this can be good for anyone who can t afford to pay interest now. Home Reversion options are limited due to a weakened property market, therefore the choice of plans available has reduced significantly. Success for us isn t about how many plans we ve sold it s about providing the best advice for as many clients as possible. Tom Moloney, StepChange. He says: We ve seen more people coming to us for advice around equity release, especially over-60s. We used to refer them to external agencies then realised this was an area where we could offer support. So for the past three-and-a-half years we have been offering specialist advice to 6,000 clients. As the only charity working in equity release, we can help the industry evolve. Because we re not a commercial enterprise our staff, methods and products are unique and the service is free, compared to average fees of between 1,000 and 3,000. Equity release hasn t always had the best image and traditional products can be expensive and inflexible but we feel there are times when they are appropriate; especially for those wanting to remain in their own home. So six months ago we launched StepChange Financial Solutions; which includes a mortgage advice team. We work with banks and lenders to build new retirement products, often for clients who have come to the end of Whatever the choice, it s about finding the most appropriate course of action. There may be times when we will advise against equity release because we feel it isn t the best solution. Our staff receive salaries not commission, so their only motivation is providing good advice. That s another thing that makes our work unique we re looking at these schemes as part of a long-term, overall financial plan. Success for us isn t about how many plans we ve sold it s about providing the best advice for as many clients as possible. We welcome partnership with debt advice providers. For more information contact tom.moloney@stepchange.org For client referrals call or equityrelease@stepchange.org CASE STUDY A couple came to us when their interest-only product ended. They had no repayment vehicle and were under pressure to sell their home. They had reduced the property price by 60,000 and were considering selling at auction. We worked with them and their lender to find a new five-year mortgage; giving them the time they needed to re-assess their situation and sell at a better price. 10 AUTUMN 2013 UKAR ARENA 11

7 There is a need to work harder to address the needs of the most vulnerable clients. Sandra Sankey, Improvement Service. 13 MAPPING THE DEBT ADVICE LANDSCAPE. New insights from a Scotland-wide report. It s the most comprehensive review of money advisory services to ever be undertaken in Scotland and a piece of research that could inform the way future provision is administered and monitored across the UK. Published in August, the joint Improvement Service and Money Advice Service report is the interim result of an ongoing two-year project looking at money advice services delivered and commissioned by Scottish local authorities. As well as reviewing those services, the Improving Outcomes in Money Advice report identifies the cost of support and makes recommendations for more efficient partnerships between local authorities and debt advisory agencies. Here co-author Sandra Sankey outlines some of its key findings and suggests how they might provide a framework for progress. As she says: This is the biggest project of its kind for a decade in Scotland so provides genuine and often surprising insights. One of the most startling was that local authorities are the main provider of services in Scotland spending 20 million a year. And, although there is a diverse landscape of advice provision which can result in greater choice and innovation it also results in overlaps and gaps. With that in mind we feel there is scope here for more development and partnership between agencies - including the Scottish Legal Aid Board (SLAB), Big Lottery, Scottish Government, Money Advice Service and local authorities. There is also a need to work harder to address the needs of the most vulnerable clients. Improving access and visibility is important here too. Improving the opportunity for more channel shifting is another area for development, while increased web and telephone access would improve engagement and assisted self-help would improve efficiency and free-up frontline advisors. service A national triage service approach has also been talked about - one clear route into the service before referral to the most appropriate source of support. We also feel referral networks need to be strengthened between money advice providers and national/local partners, and the health sector. Whole single tracking referral systems could strengthen partnership working and make better use of collective capacity. Affordable credit is another must, along with sustainable solutions for individuals excluded from mainstream banking options. Measuring outcomes is another area where we can see scope for development. Funders need support in doing this and there is a need for these performance indicators to be built into future systems. Achieving common reporting will provide a better overview of money advice activity but will require leadership from key agencies. There is also need for more joined-up approaches to financial capability, inclusion and education, including consideration of developing a national financial capability strategy. Strengthening partnerships between money advice services and other agencies providing support that can be related to debt problems is key too. Anecdotally we know that there will be an increased need for these services in future the economic climate, rise of payday lending and other less affordable credit and continuing welfare reform are all having an impact so we are keen to help them shape them to best suit customer need. We hope that this research and the recommendations that will be made from it can play a big part in that process. Visit improvementservice.org.uk/ improving-outcomes-in-money-advice 12 AUTUMN 2013 UKAR ARENA 13

8 The team works with providers to increase our customers' awareness & exposure to debt advice. 15 MEET THE STRATEGY TEAM. Richard Smith, UKAR Customer Assistance Strategy Manager. We analyse data and identify opportunities to deliver help to groups of customers in similar circumstances. Richard Smith, UKAR. Where does debt advice fit in? Debt advice is integral to our Customer Assistance strategies and in recognition of this, the team were brought into the Strategy fold at the back end of last year. The Strategy Team works closely with stakeholders and actively promotes debt advice throughout the customer journey. The team also works in partnership with providers to find ways of increasing our customers awareness and exposure to debt advice. Here at UKAR we are committed to helping our customers improve and maintain their finances and guiding them through times of crisis. The Strategy Team plays a vital part in providing this support, working closely with clients and the debt advice industry, to aid customers who have fallen behind with mortgage payments. We operate in three key areas; Core, Non-Core and Debt Advice. Core concentrates on secured debt, Non-Core on unsecured debt, financial hardship, administration and third party service providers, while Debt Advice looks at strategy and engagement with the wider advisory community and internal stakeholders. What we do By analysing data we are able to identify opportunities to deliver help to groups of customers in similar circumstances, displaying similar behaviour or who have similar profiles. These opportunities are realised through the design of bespoke strategies, enabling our frontline colleagues to speak to the right customers and take the right decisions and actions by understanding the customers needs. This ensures the most appropriate outcome for the customer and maximises the company s return - ultimately resulting in benefit to the taxpayer. All of this is carried out in line with the businesses risk appetite, compliance, legal and industry regulation. We have to be able to work in-line with regulatory, audit, compliance and business needs whilst ensuring the customer is at the heart of all that we do. This can sometimes be a juggling act. One of the team s objectives is to demonstrate the value of debt advice. This will be achieved by tracking customer outcomes and comparing them to outcomes achieved via customer engagement with our colleagues in Customer Assistance, third parties acting on our behalf and court set arrangements. Initial results from this analysis will be available at the end of the year. Why we do it Achieving the right outcomes for customers and maximising value for the taxpayer are not mutually exclusive. By helping customers get back on their feet and return to sustainable terms, or by helping customers exit unsustainable home ownership through Assisted Voluntary Sale we reduce or avoid losses. Things never seem to stay still That s what makes our jobs so interesting. The economy is constantly changing and evolving as is the industry we work in. We work with operational areas to understand what s happening on the front line, monitoring developments that might impact the team and our methods. 14 AUTUMN 2013 UKAR ARENA 15

9 Our key debt advice partners: AUTUMN 2013 ISSUE 6 Let us know your thoughts and views about UKAR ARena. us at debtadviceteam@ukar.co.uk To sign up to the distribution list for future e-zine copies of UKAR ARena, please debtadviceteam@ukar.co.uk Visit or