2016 saw the fair treatment of long standing customers receiving focus. The Financial Conduct Authority (FCA) reported on a review of 11 Life Insurance firms and then issued Final Guidance in December 2016. The report concentrated on a variety of areas, but the way in which customers that are gone away from their address are treated is the subject of focus for this post. The following information is a summary extracted from the FCA reports on the findings relating to gone away customers together with the mitigating recommendations the FCA make.
FCA Thematic Review on gone aways - round up
“The overall picture is poor, with over half the firms demonstrating weaknesses which had resulted in, or were very likely to result in, poor customer outcomes.”
Examples of poor practice taken from the FCA Thematic Review paper:-
Poorly defined and ineffective processes.
No measurement of the success or otherwise of the various gone away activities.
Not using telephone numbers held on file
Inconsistent approach to “gone away” customers across different parts of the business, resulting in not all systems being updated with a new address.
Firms who were unsuccessful in re-establishing contact at the first attempt did not attempt to re-establish contact with customers again for significant periods of time.
Examples of good practice taken from the FCA Thematic Review paper
Taking proactive steps to collect multiple customer contact data points to mitigate the often simple oversight of customers forgetting to inform them when moving address.
Proactive checking of customer details against credit reference databases to anticipate ‘gone away’ customers before mail is returned.
When re-establishing contact with “gone away” customers, most firms used tracing.
The review found "correlation between high levels of gone away rates and the weaknesses raised above, including not using all customer contact information in the initial trace and potentially long periods between attempts to re-trace."
Summary of Final Guidance taken from the FCA report
Establish systems and controls to proactively minimise new ‘gone away’ customers.
Clearly define a ‘gone away’ customer.
Have a clear and documented strategy across all products for re-establishing contact with ‘gone-away’ customers.
Clearly define processes for dealing with products where customers could not be traced
Attempt to re-establish contact with customers who have ‘gone away’.
Adopt a consistent ‘one firm’ approach.
Assess the effectiveness of ‘gone-away’ activities and understand the key drivers of success
Attempting recontact at point of ‘gone-away’ and, if unsuccessful, within 18 months of the first attempt and, if again unsuccessful, at least every three years after that.
Correspond with their customers regularly, and proactively seek and hold full (phone/email/address) contact details.
If firms have multiple customer contact points they should maintain consistent, up-to date information on the multiple profiles or a single customer profile.
Undertake electoral register and mortality checks.
Use the DWP letter-forwarding service.
Depending on the profile of their customer, utilise BT directory enquiries, 192.com database search, insolvency data, internet research e.g. social networks, bank letter-forwarding service, and/or beneficiary tracing services (e.g. heir hunters, probate researchers, professional genealogists).
How can The Tracing Group help?
The Tracing Group believe that this guidance will help firms re-establish good relationships with customers which should lead to better outcomes for all. For more information about how The Tracing Group can assist your firm to develop a strategic approach, improve overall data quality and proactively trace "gone away" customers, please contact us.