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TCF Principles in an insolvency practice

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John Smith Blue Vision By John Smith, Technical Director, Visionblue Solutions

21 December 2018

Now, possibly more than ever, there is a push in the industry to ensure debtors are being given the best advice and being put into a debt solution that is most suited to their situation, says John Smith, Technical Director of Visionblue.

This is a positive drive, the horror stories of debtors being mis-sold debt solutions are something we would all like to eradicate.

In conjunction with this trend, there has been a move to adhere with the FCA’s Treating Customers Fairly (TCF) principles. So, what are the TCF principles?

Well, they basically set out six consumer outcomes that firms should strive to achieve so that customers are provided with the correct solution for their specific situation and are treated fairly throughout their journey. In summary, the TCF principles require:

  1. Fair treatment of customers central to corporate culture
  2. Products and services designed to meet needs of identified consumer groups
  3. Consumers are provided with clear information and kept appropriately informed
  4. Advice given to consumers is suitable and takes account of their circumstances
  5. Products\services must be of an acceptable standard and perform as consumer led to expect
  6. Processes exist post appointment to allow consumers to make a complaint

Many Insolvency Practitioners have implemented some, or all of the FCA’s TCF principles successfully into their daily operation. Adhering to the FCA’s TCF principles can seem like a daunting process, one that will require an overhaul of a firm’s daily operation. However, it’s not as daunting as it would seem.

This can be achieved by adding small steps to your daily operation. For example, carrying out a full review and comparison of all potential solutions available to the debtor, and carrying out additional vulnerability checks during the insolvency process.

I come with good news

Here’s the best bit! There are systems that can carry the burden of ensuring that Insolvency Practitioners adhere to the FCA’s TCF principles through automated processes such as:

  • Best Advice provided through a rule-based decision engine that automatically reviews the debtor’s unique situation.
  • A step by step review of a Customer’s Vulnerability which results in the debtor being worked with in an appropriate manner depending on their personal circumstances.
  • Automated Multichannel Communications so that a debtor can decide how and when they would like to be contacted and for that contact to be made without the need for user interaction. For example, a gently worded SMS to the customer letting them know a payment has been missed when a contribution hasn’t been received within a set number of days. It is essential however that there are controls to ensure that the client is not bombarded.
  • Dynamic workflows that react not just to case specific information, but also, to changes in the client’s personal situation automatically without reliance on users.
  • Management Information reports that highlight any failures in process and are automatically delivered to the correct recipients on a scheduled basis.

The fair treatment of debtors is of increased importance and that importance seems to be growing by the day. It seems as though firms with a reputation for treating their customers fairly, those with low failure rates are starting to see the benefits. It’s crucial to put the controls in place now, in order to stop your firm falling behind.

My advice? Step one; Review your daily operation to verify that you are confident that you are treating debtor’s as fairly as possible. Step two; Review your systems now to ensure you are set up to do so in the most effective and efficient method possible.


Learn more about Visionblue

Visionblue


About the author

John Smith worked in practice for 12 years prior to joining Vision Blue Solutions in 2009. As Technical Director at Vision Blue Solutions, John is involved in ensuring efficiencies are achieved throughout standard functionalities as well as customer specific adaptations to documents and diaries.


This blog is one of a series of articles from our commercial partners.
The views expressed are those of the commercial partner and not necessarily those of ICAS.

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