The first round of “enhancements” start on 1 March 2013.

Judging from comments at our recent seminars and from client feedback, the changes to hardship procedures will affect all credit licensees whether they are ADI’s or not.

A major issue is the training of non-collections staff to recognise the hardship implications of calls or visits from customers seeking even short-term relief from repayments.

When discussing collections issues, there is a general concern about the delay and cost of EDR and in some cases the increasing incidence of EDR when the customer has had no prior contact with the lender. Enforcement action is suspended whilst the matter is at EDR.

In the marketing sessions there was an increasing understanding of the benefits of close co-operation between Marketing and Compliance and the value that Compliance brings to marketing campaigns beyond checking for restricted terms and disclaimers.

For non-ADIs small amount lenders the enhancements have already had a significant impact on their business models, resulting in changes to their products and costs and in some cases, ceasing to operate.

Providers of consumer leases are waiting for details of further regulation.

We will discuss particular issues in detail over coming months.