TCF checklist released in reaction to crisis
Daily news headlines
Consumer groups the NCC and Financial Inclusion Centre have produced a TCF checklist for firms to help protect vulnerable borrowers
LONDON – Treating customers fairly amid the present ‘perfect storm’ of market conditions is the theme of new research by the National Consumer Council (NCC) and the Financial Inclusion Centre.
The NCC highlights that 4 million UK customers are vulnerable to changes in the financial climate, and asks what can be done in the short and long term to limit the credit crunch’s impact.
The study encourages lenders to be sympathetic in the way they deal with vulnerable customers and sets out a checklist to help translate the Treating Customers Fairly initiative into practice. Lenders are advised to contact borrowers they class as being at risk – such as first-time buyers and customers with discounted fixed-rate deals due to end – before they encounter difficulties.
For borrowers with short-term difficulties, lenders are advised to offer a range of interest rate relief options, such as temporary interest rate cuts and payment holidays. The study also advises the suspension of penalty fees and recording positive credit data for customers participating in debt management schemes, with third-party recovery and legal action only employed as a last resort.
Mick McAteer, director of the Financial Inclusion Centre, says: “Remember, this is just the first phase of the credit crisis. The priority is to protect over-indebted consumers most at risk. Lenders have a chance to show they take corporate social responsibility seriously.
“But long-term solutions are needed to protect millions of consumers who could be trapped in expensive and potentially unfair loans, or denied access to fair and affordable loans in the future.”
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