The assessment of affordability and the identification of vulnerable customers are crucial components within a collections function for any creditor. Implementing effective techniques and tools to manage these processes is essential for ensuring fair treatment of customers, compliance with regulatory requirements, and maintaining the financial health of the organisation. This article outlines the key elements needed for successful implementation, highlights the importance of this practice, and details the expected benefits.
Why Assessing Affordability and Identifying Vulnerable Customers is Important
Assessing affordability ensures that customers are not burdened with repayment plans they cannot sustain, thereby avoiding the escalation of financial distress. Identifying vulnerable customers allows creditors to offer tailored support and interventions, preventing further harm and promoting financial rehabilitation. These practices align with regulatory expectations, particularly those s...
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