Lenders should thank Mortgage Strategy for the valuable reminder on the importance of managing outsourcing in the article headlined ‘Third party firms not sticking to arrears rules’ (Mortgage Strategy, November 15).
It’s a sad truth that lenders can easily find themselves embroiled in all kinds of Treating Customers Fairly and fraud issues without any ill intent on their part.
Overzealous arrears management, mis-selling and mortgage fraud can be perpetrated by one rogue operator who escapes the lender’s attention.
To avoid this, lenders need to implement supervision systems for all outsourcing providers.
In the article Kevin Friend suggests placing an inhouse representative in all third party firms but this is impractical.
Repossessing property requires multiple departments, contractors and sub-contractors, all of which need to be carefully managed. It’s crucial to back up personal relationships with IT support, which can track the flow of information and update those involved in the process.
This guarantees that every party knows what they need to and it will go a long way towards preventing blunders and ensuring inappropriate action is visible.
But more importantly, lenders must create a culture of vigilance. Staff need to know that management want to hear about discrepancies and who the person to inform is.
They should be able to feel proud of their diligence, rather than nervous. To achieve this lenders must show their staff that vigilance is important by procuring the necessary IT, arranging the necessary visits and naming the person in charge. Anything less leaves them in the dark and at risk.