The Financial Conduct Authority has told a number of firms to improve their practices when it comes to dealing with customers in debt difficulties.
According to its latest thematic review, the regulator found some consumer credit firms failed to treat customers fairly, and were instead focused on securing payment as quickly as possible.
The FCA said this could lead to delays, undue distress and the avoidable exacerbation of debts before customers with long-term financial difficulties secured an appropriate repayment solution.
The review revealed that the repayment solutions offered to customers varied significantly in terms of the range of solutions offered, and the way in which payment difficulties were assessed.
The review found under two thirds of firms had policies aimed at achieving fair outcomes for customers, but the firm’s intentions and policies were not always carried out by staff in practice.
Around a third of the firms had a culture that was less customer-centric than other firms in the sample and focused on securing payment as fast as possible, often at the expense of giving due consideration to customers’ circumstances.
In these firms there was widespread evidence of poor customer outcomes.
The FCA stated: “We encourage all firms to consider their culture and approach to customers in financial difficulties and to make improvements where necessary.”
However, the report also said many firms had improved the way they deal with customers in arrears.
According to the report, firms which put customers at the heart of what they do saw the benefits of engaging with customers and agreeing sustainable repayment solutions.