Assurance of consumer credit redress programme design, and detriment and redress calculations

Following FCA thematic reviews of consumer credit firm’s application of COVID-19 and general forbearance requirements, this non-bank lender established a past business review programme to assess whether customers had suffered detriment (including distress and inconvenience) as a result of the firm’s engagement with them.

The firm required assurance that the design, scope and methodology of the programme met with regulatory requirements and expectations, and that assessments and calculations had been carried out accurately and in compliance with the design.

We carried out work in three phases:
– Review of the programme design, including elements such as customer segments in scope (including consideration of vulnerable customers), types of detriment considered, methodologies used to calculate any detriment (including non-financial detriment such as distress and inconvenience), and the proposed timelines and customers communications protocols.
– Selection of samples of completed detriment assessments and redress calculations, and reperformance of the work to ensure it had been conducted in accordance with the designed process.
– Selection of samples on ongoing customer interactions to ensure that these met with the firm’s revised policy standards.

Our work ensured that the firm (and its regulators) had assurance that the past business review had comprehensively dealt with any historic customer detriment issues, and that current and future business interactions with customers have been upgraded to avoid any new harm.