Bank staff get ‘sensitivity’ training before calling in Covid debts
Bank staff are undergoing “sensitivity” training in an effort to avoid adding further pressure to the UK’s mental health crisis as they prepare to call in loans issued during the pandemic.
Hundreds of workers at major banks including HSBC, NatWest and Metro Bank are understood to be receiving training in how to deal with vulnerable customers and “demonstrate empathy” as the first wave of repayments for coronavirus loans fall due.
HSBC, which now has 400 staff in its debt collection team, said the aim was to ensure staff had a “consistent understanding of vulnerability” and are “aware of the factors that could make an individual vulnerable” when having repayment conversations with customers.
An executive at another bank said its expanded debt collection team was being trained in “empathy, vulnerability and listening skills”. The person said: “Ultimately, we don’t want to damage the economy by being overly aggressive.”
Since the start of the pandemic banks have lent over £75bn to cash-strapped businesses through emergency support schemes, which are interest-free for a year and backed by the taxpayer. It is up to the banks that made loans to chase the debts on behalf of the Government.
However, it has sparked fears among bankers that having to aggressively demand cash from struggling entrepreneurs will mean the industry is cast as the villain of another economic crisis.
Stephen Jones, the former chief executive of UK Finance, said last May: “The banking industry is the collection agency and, unfortunately, I fear we will end up being the bad guys again when it turns out that money can’t be repaid.”
There have also been concerns that some businesses wrongly assumed the emergency loans were effectively grants that would never have to be repaid.
Teaching those responsible for chasing debt repayments on how to better deal with vulnerable customers comes as charities and psychiatrists warn that the pandemic could trigger an unprecedented mental health crisis.
Neil Shah, founder of the Stress Management Society, said in an interview last week: “We’re in the middle of a major mental health crisis. Mental health helplines are experiencing a huge surge in calls and leading charities need more support.”
As a result, banks will be under pressure to ensure they are acting as sensitively and flexibly as possible when speaking to vulnerable customers.
Even before the Covid crisis, the Financial Conduct Authority had been urging financial companies to better serve the millions of struggling consumers in the country. In 2019, the regulator highlighted several cases of poor practice that it hopes to see stamped out. In one instance, a customer who had recently lost their partner went to the bank for assistance and was told: “There isn’t anyone here who does bereavement today. Come back tomorrow.”
However, the Court of Appeal recently ruled that a bank is under no implied duty to exercise reasonable care and skill during the recovery process, following a default in repayment of a loan. Banks will also be under pressure from the Treasury to chase the Covid loan money as much as possible on behalf of the taxpayer.
