Arrears Default and Financial Difficulty Audit | Application of Interest and Charges | Communication with Customers and Data Accuracy | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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Arrears, Default & Financial Difficulty Audit

The company carries out regular audits on all processes, including on our arrears and default measures, controls and procedures. We utilise an audit checklist for this review and then complete a gap analysis report and an action plan based on area areas of non-compliance or where improvements are identified.

Our arrears and default audit checklist are retained externally from our manual for ease of use, recording and maintaining.

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21.18 Application of Interest & Charges

The company confirms that where any charges are levied against a customer for debt collection services on an account in arrears, we consider all proceedings in compliance with Principle 6 and ensure that the customer’s best interest are considered.

If costs are claimed and levied against the customer, this will only occur where we have a legal or contractual right to do so and where no such contractual obligation occurs, we will not mislead the customer about the repayment of costs.

Any charges or interest levied on an arrears account are confirmed to be no higher than the statutory interest rate or the actual costs associated with the collection activity to the firm.

21.19 Communication with Customers

Where customer contact is initiated on an account in arrears, the company ensures that it complies with the regulatory requirements as set out in CONC 7.9 of the FCA Handbook. When communicating verbally, face to face or in writing with a customer in arrears we can confirm that our staff: –

• Advise the customer the purpose of the call and if not the firm itself, what relationship they have to the firm
• Do not provide any information or make any statements that could confuse or mislead the customer regarding the nature of the communication
• Do not contact a customer at unreasonable times or at a time or place that the customer has previously requested us not to contact them
• Do not use premium rate numbers only as on option for call backs
• Do not disclose or threaten to disclose information about the customers’ debt to any 3^rd party
• Act in a manner that is respectful and professional at all times
• Take reasonable steps to ensure that 3^rd parties do not become aware that the customer is being pursued in relation to a debt, such steps include: –

• • ensuring that any envelopes used do not express the nature of the content or reason for contact
  • ensuring that no voice messages are left with details of the nature of the call
  • not disclosing any information to a 3^rd party who we may speak to on behalf of the customer

Where we employ a debt collection agency who offer home visits for collecting account arrears, we carry out assessments and monitoring on such suppliers to ensure that they are compliant with our business requirements and the regulatory requirements under CONC 7 and that they do not: –

• act in a threatening manner towards a customer
• visit a customer at a time when they know or suspect that the customer is, or may be, particularly vulnerable
• visit at an inappropriate location unless the customer has expressly consented to the visit
• enter a customer’s property without the customer’s consent or an appropriate court order
• refuse to leave a customer’s property when it becomes apparent that the customer is unduly distressed or might not have the mental capacity to make an informed repayment decision or to engage in the debt recovery process
• refuse to leave a customer’s property when reasonably asked to do so
• visit or threaten to visit a customer without the customer’s prior agreement when a debt is deadlocked or reasonably queried or disputed (see CONC 7.14 (Settlements, disputed and deadlocked debt.))

21.20 Data Accuracy

Where information is passed to a 3^rd party to trace or collect a debt from a customer on behalf of the company, we have in place procedures and security measures to ensure that the correct and accurate information is passed over and only that which is relevant for the pursuing of the account.

The procedures used for this purpose are our Outsourcing Procedures and our compliance with the Data Protection Laws in the using and sharing of personal data.

Our staff ensure that as part of our Arrears and Vulnerable Customer policies and procedures, they note on an account any information which is relevant to the 3^rd party such as the customer being in financial difficulty or being identified as a vulnerable customer.

Accounts passed to 3^rd parties for trace or collection are monitored and audited by the Compliance Office on an ongoing basis to ensure that our obligations under the regulatory system are met.