60 Seconds with...John Fairhurst

26 July 2010

JOHN FAIRHURST
MANAGING DIRECTOR
PAYPLAN

How does your Reference Point system work?
Reference Point is designed to be part of the lender application process. The idea is that a lender puts their potential customers in touch with us and we take them through a process that is similar to the one we follow when consumers are looking for help with regard to their debt situation.

So we do a detailed fact-find to assess their income, their outgoings, the debt on their house and their general financial circumstances. Then we produce an analysis of their financial stability.

So based on the 70,000-plus clients you have on file you build up comparative customer profiles?
Yes, so what we report back to the lender is effectively a score based on our experience but also a narrative that provides the lender with detailed information to allow it to make an informed decision. It’s not the sort of thing credit reference agencies would do. They would point out that a person has a certain score or credit reference - our system is more about saying we’ve contacted the person and these are some of the issues that might affect their ability to repay.

Are you offering this in the wake of the effective scrapping of self-cert and fast-track?
Yes. We think that lenders will be expected to take an increasing amount of care in the way they make lending decisions and our system should allow them to demonstrate that there has been a thorough analysis of potential borrowers’ circumstances.
Frankly, one of the biggest difficulties consumers face is accurately estimating what their outgoings are. Quite often they forget about some things, or are overly optimistic or pessimistic.

You also offer a service to help lenders manage arrears - do you think they are improving the way they deal with consumers?
Well, in terms of bad practice, the biggest issues we see among lenders revolve around a lack of adequate engagement with consumers. It’s bound to create problems if lenders don’t feel able to speak to consumers in an open and honest way. The range and extent of forbearance strategies that lenders are prepared to offer their customers is more comprehensive than I have seen in the 20 or so years I’ve been involved in debt advice.

A number of lenders are trying to be particularly flexible at the moment, and go further than government initiatives, so there are some good opportunities for consumers in financial difficulties.