IA & HardshipRegulatory ObligationsThe SolutionSuccess Story

IA FOR HARDSHIP ASSESSMENT
– Incredo Analytics is already helping collection operations and financial councilors to make informed decisions about hardship.
– It is also easy for the hardship applicant to provide supporting financial information in minutes.

Parent company Incredo has enabled the Incredo Analytics product to be rolled out as a high quality and secure hardship service, which credit providers are now using as part of their financial hardship processes. Incredo Analytics retrieves a read-only copy of a debtor’s bank statement and compiles this data to produce a report that assists in a hardship assessment. Based on the online nature of the Incredo Analytics product, our solution is fast and creates a better experience for both parties.

Through Incredo Analytics, credit providers are able to receive an analysed hardship application from a debtor in under two minutes. This means that completion of a hardship application is now possible during the same phone call as when receiving the debtor’s hardship notice. The primary benefit to creditors in this is that it reduces turnaround times on applications and increases the operating efficiency of a credit provider, while reducing stress for a debtor.

Section 72(2) of the National Credit Code (annexure to the National Consumer Credit Protection Act 2009) states:

Within 21 days after the day of receiving the debtor’s hardship notice (which can either be given orally or in writing), the credit provider may give the debtor notice (also either orally or in writing), requiring the debtor to give the credit provider specified information within 21 days of the date stated in the notice. The information specified must be relevant to deciding:

A: Whether the debtor is or will be unable to meet the debtor’s obligations under the contract; or

B: How to change the contract if the debtor is or will be unable to meet those obligations.

Furthermore, section 72(3) states that the debtor must comply with the requirement:

Upon receipt of a hardship notice from a debtor, credit providers are lawfully obligated to (before the end of the period identified) issue notice to the debtor as to whether they agree to vary the terms of a debtor’s contract or not based upon the grounds of hardship. Should they decline to vary the terms of the contract, they should specify their reasoning as to why.

In order to come to this decision, the credit provider is expected to quickly identify, assess, and apply appropriate hardship treatment strategies in a fair and even fashion. However, this process can be dragged out in situations where the customer fails to provide the necessary information, or the information is inconsistent to satisfy the ‘specified information’ standard as per the original request. As a result, the credit provider is forced to expend more of its time and resources in order to complete the application in accordance with the law.

A credit provider can consider bank statements that illustrate the debtor’s income and expenditure as sufficient information to be able to determine whether the debtor is able, or will be unable, to meet their obligations under a payment arrangement.

Retrieving the bank statements through Incredo Analytics assists credit providers in making an assessment in connection with the customer’s financial circumstances. While the nature of hardship is subjective and determinate on the particulars of individual circumstances, it can be said that determining whether a debtor is in financial hardship will be based on a number of factors, including:

A: Whether there is an existing surplus between the debtor’s income and expenses;

B: The amount of hazardous spending the debtor is participating in;

C: The source of the debtor’s income (including whether all or part of the debtor’s income is sourced from Government benefits)

D: How consistent and reliable the debtor’s income is; and

E: The debtor’s other debt repayment obligations and similar commitments.

Through Incredo Analytics, credit providers are able to receive an analysed hardship application from a debtor in under two minutes. This means that completion of a hardship application is now possible during the same phone call as when receiving the debtor’s hardship notice. The primary benefit to creditors in this is that it reduces turnaround times on applications and increases the operating efficiency of a credit provider, while reducing stress for a debtor.

Incredo Analytics first tested the service in a hardship environment by developing a trial profile for use by Nexxa Portfolio Management (‘Nexxa’), a collections agency based in Brisbane.

The qualitative and quantitative data received by Incredo from Nexxa truly demonstrated the impeccable quality of the product in its function as a hardship assessment tool. The trial account was used for three months by Nexxa personnel, and the service was deemed by Management to be so outstanding that the company subsequently upgraded to a paid subscription.

“I have been working with Incredo Analytics now for the last 8 months. It has proven to be a great and essential tool for Nexxa to use when assessing debtors/customers for potential hardship variations on their accounts.

Hardship itself can be quite complex when identifying how the customer may approach an account. A customer’s financial position is subject to many factors which can be hard to read when you’re simply looking at a paper bank statement.

That’s where Incredo Analytics comes in. Not only does Incredo Analytics software steer us in the right direction, but it also manages to conduct an in depth analysis; a breakdown if you will, that helps us identify all these characteristics of a customer’s financial position in a nice and easy to use interface.

The Incredo Analytics breakdown categorises each transaction into select fields; the system helps us find what the customer’s spending patterns are, possible high risk payments being made, income streams and sources, fees debited and how often the customer may visit re-occurring vendors.

Incredo Analytics has proven to be a vital tool we use here at Nexxa to conduct hardships in the most integral and efficient way possible. It has increased productivity ten-fold, all the while giving us the credible and un-disputed information to make decisions that not only satisfy our clients but also our customers.”

Scott Reimers, Team Leader, Nexxa Portfolio Management

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