The resourcing crunch: preparing for a remediation surge

What happened?

In a recent webinar, Mike Morris, Head of Operations at Momenta, and Garry Evans, Chief Product and Commercial Officer for TCC Group, discussed how the Supreme Court ruling has shifted the balance from high-volume automated redress towards more complex, bespoke complaint handling.

Before the ruling, firms expected a large proportion of cases, potentially 75–80% or more, to move through an automated workflow from tracing through to redress. Since the ruling, the volume of cases eligible for automated redress is lower, but the volume of complex cases sitting outside that population, and requiring more tailored, human review, is higher.

Claims management company involvement is expected to add further complexity, identifying additional complaint points that need to be triaged and assessed through a more nuanced decision-making process.

Why does it matter?

All motor finance firms with a back book of relevant agreements will be affected, with a large number of remediation projects expected to run over the next 18 months. Demand for experienced case handlers, able to assess unfair practices and customer circumstances, is likely to outstrip supply in that period.

A number of motor finance creditors have already begun procurement exercises ahead of full clarity on scope and process from the FCA, raising the risk that firms end up competing for the same pool of specialist resource.

While redress payments to individual customers may be lower than first anticipated, the overall processing cost of remediation is likely to be higher, given the added complexity of the cases now in scope.

Who is affected?

Motor finance creditors with back-book agreements in scope for remediation, and the wider delivery market, including professional services firms and business process outsourcers, competing for the same specialist resource.

Key risks

• A shortage of experienced case handlers able to assess unfair practices and customer circumstances over the next 18 months.
• Rising cost of resource as multiple firms compete for the same specialist talent pool.
• Delivery delays for firms that wait for full clarity on scope before starting procurement.
• Additional complexity introduced by claims management company activity on existing cases.

Actions to take

1. Review policies and procedures now, ahead of confirmed scheme detail, to bring compliance practices up to date.
2. Consider offshore delivery options to access experienced resource at a reduced cost.
3. Start procurement and resourcing plans early rather than waiting for full clarity on scope.
4. Strengthen underlying processes so less experienced resources can be supported and scaled quickly.

Wider implications

Firms that start preparing now, by reviewing policies, tightening procedures and considering alternative delivery models such as offshore teams, will be better positioned to respond at scale once the FCA’s redress scheme is finalised.

Recommendations

TCC, Recordsure and Momenta can help firms secure the right skills, design efficient processes and minimise operational risk ahead of the redress scheme.