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Arrow Global


Credit Collections and Risk: What does TCF really mean to you?
Published on 01/03/2011

What does treating customers fairly (TCF) really mean? Is it just a nice industry catchphrase or buzz word like 'segmentation' that looks great on an RFP response or in an investor pack?

I fear that to many it is just that - a catchphrase that means that you, at least, pay passing attention to the 'customer' behind the 'debtor'.

Unfortunately, by making TCF just lip service, as an industry we tend to diminish the true value of this initiative.

There is no doubt that we all aspire to treat each customer with respect and empathy. However, too few businesses, in debt purchase and collection, seem to fully appreciate that, by proactively imbedding the TCF principles as a core element of a business model, companies (and the industry as a whole) become both more efficient and more compliant.

At Arrow we use the term 'assume positive intent' as a core principle of customer service. That is, we assume that all customers want to find an appropriate solution to their individual financial conundrum, and our job is to help them find the tool that is right for them.

Sometimes this entails a softer approach, for example, in the case of customers in hardship; whereas sometimes it requires a slightly more assertive approach, for example, when a customer has the ability to pay, but lacks the willingness to do so.

A tailored approach

The most important thing to remember is that the answer is not a 'one-size-fits-all' strategy, but rather one that is tailored to each consumer's unique circumstances.

To make this possible, a business needs to have the requisite data available and the analytic competency to have the said data drive the appropriate strategic solution for each customer. That is the difference between 'quality control' - analysing failures as they occur - and 'quality assurance' - proactive process management.

TCF is becoming increasingly imbedded in the banking sector, but has yet to have as profound an impact on debt buyers and collections agencies.

I believe this focus, on the part of both originators and regulators, will increasingly begin to shift in the near future. There is already an evidently increased emphasis on TCF during the RFP and acquisition phases of debt

purchase. Creditors fully recognise that their reputation is inextricably linked with that of any external recoveries partner, whether for debt collection or purchase.

As a result, creditors are becoming increasingly proactive in ensuring consistent alignment with their business principles and regulatory requirements throughout the recoveries lifecycle. We believe this trend is set to intensify.

Workable action plans

The use of data and analytics to assess accounts individually and form workable action plans for each customer is critical to the successful implementation and consistent practice of TCF.

Intensive data management and analysis, combined with our outsourced business model and world-class supply chain management, is key to our success.

Similarly, each business in the industry will have its own unique selling points and strengths. However, we are all united by the fundamental requirement to interact with, and care for, our customers in the most responsible and ethical manner possible. The principles of TCF encapsulate this obligation well.

We need to work together, as an industry, to proactively embed TCF throughout our businesses; we have made positive strides in the right direction, as evidenced by the DBSG-led audit initiative currently underway in partnership with PWC.

However, there is much work still to be done to ensure we all really live up to the principles to which many pay lip service. Not only will customers benefit, but so too will our businesses. Enhanced compliance and increased efficiency - what could be a more powerful recipe for success? CCR-2

Matthew Buckman is the chief operating officer for Arrow Global


Arrow Global Limited is registered in England and Wales with company number 05606545. Its registered office is at Belvedere, 12 Booth Street, Manchester M2 4AW. Arrow Global Limited ("AGL") is authorised and regulated by the Financial Conduct Authority for certain credit-related regulated activities, and is part of the Arrow Global Group. AGL is registered on the Financial Services Register under registration number 718754.