By Peter Wallwork, CEO of the Credit Services Association
2017 is set to be a challenging year for credit and collection firms with some major new legislative requirements to prepare for.
Here are three new legislative requirements that credit firms need to be prepared for in 2017 and how to make the most of them.
The Apprenticeship Levy
The Government’s reformed apprenticeships initiative includes a compulsory Levy for companies who have a payroll of £3m or more. For levy paying companies this is a ‘use it or lose it’ tax which can be turned into an investment in the business and when managed effectively will support your existing talent management and development strategies.
Within the debt collection industry, a number of specific apprenticeship standards have been created that will be offered and supported by the CSA. These range from the new standard in Financial Services Credit Controller/Collector through to the most advanced Senior Compliance/Risk Specialist Apprenticeship standard, and supporting and advising companies on routes for more specialist roles in IT, HR and Legal. It serves as a very tangible illustration of the broad nature of the training now available. It also serves to show how debt collection can provide a challenging and fulfilling career to those who may think otherwise!
Here are some key considerations for those within Levy-paying firms with responsibility for delivering on apprenticeships:
- External recruitment – if you are planning to use apprenticeships as part of your recruitment plans, you need to know how and where you are going to promote the opportunities to ensure that you attract the candidates you want. This might open up new and cost effective recruitment strategies for your business.
- Selection – whether you are using apprenticeships as part of your external recruitment and/or your internal development plans, again you need to consider how you are going to identify the right candidates?
- On-boarding – Focus on the on-boarding process and consider how you are going to maximise your retention and reduce attrition rates.
- Training and learning – will your in-house team /learning resources provide some of the training or do you need external delivery partners? If the latter, how will they be selected?
- Performance and supplier management – how are you going to manage the performance of your apprenticeship suppliers and programmes?
- Success measures – how will you demonstrate to the business that they have received value from the investment in apprenticeships?
With some strategic planning and a clear link to key business priorities, the Apprentice Levy should not be seen as a drain on resources, but rather as an initiative that can add real long term value to the business.
Ofcom policy on ‘persistent misuse’
UK communications industries regulator Ofcom’s new ‘persistent misuse’ policy comes into force on 1 March 2017. The policy outlines how Ofcom will use its powers to take action if a person ‘persistently misuses an electronic communications network or service’. The main focus of the policy for our industry is on silent and abandoned telephone calls and Ofcom will prioritise enforcement action wherever forms of misuse cause significant consumer harm.
The CSA had significant concerns about the original policy that was consulted on last year because the proposals to impose zero tolerance on abandoned calls would effectively have rendered the ‘compliant’ use of automated dialling systems impossible. Ofcom then revised the policy to take on board our feedback stating that: “Instead, we will apply the statutory definitions of both persistence and misuse on a case-by-case basis, taking account of the ordinary meaning of the words.”
We are encouraging our members and their clients to engage with each other to discuss expectations around abandoned call rates, dialler strategies and their approach to compliance with the statement of policy.
There are also other aspects of the policy that will have an impact on our members and we are engaging with Ofcom to ensure that these are fully understood and implemented. One such aspect is the inclusion of ‘agent behaviour’ which could result in ‘dual-regulation’. When preparing for policies of this nature, it is important that firms take the time to fully understand what the implications are. This can be complex and requires more than just a ‘tick box’ approach.
General Data Protection Regulation
Although it won’t apply until 28 May 2018, credit firms should be preparing for the new General Data Protection Regulation (GDPR) now. It is a piece of European legislation which is set to replace the UK’s current data protection legislation, the Data Protection Act 1998, despite the referendum vote to leave the European Union.
It will affect any organisation that processes personal data – including employee data. It will also introduce new rights for individuals concerning their access to their own data and the manner in which it is processed. The new legislation will increase accountability for data protection and will give individuals more rights in relation to their data (including access rights). It introduces new obligations for reporting data protection breaches and removes the option for organisations to charge a fee for Subject Access Requests. The changes to data protection legislation are going to mean that firms will need to scrutinise their data protection practices to ensure they meet the new requirements.
There will be tough new sanctions for organisations who fail to comply with the GDPR and individuals will have increased rights to claim compensation.
We have recently published detailed guidance for our members on exactly what they can do to address each of the new requirements – and this is something we are encouraging them to start doing now. We’re also developing a Code of Conduct for GDPR through the Federation of European National Collection Associations (FENCA) which will help the debt collection sector apply best practice.
Making legislative changes work for your organisation is down to constant learning and development that takes each new requirement as an opportunity to further improve practice.