SERVICE ONE is part of the credit unions and mutual building societies network, and financial institutions as part of this network have collectively agreed to adopt 10 key principles when it comes to dealing with Members experiencing financial hardship. Information on this approach can be found below.

Credit unions and mutual building societies are owned by their Member borrowers and depositors. Members, as owners, have always been treated with care and respect whether or not they are experiencing financial hardship. Members in financial distress are treated on a case by case basis using a range of common remedies and options. These are outlined below and applied depending on the borrower’s circumstances.

SERVICE ONE supports the government’s objective of ensuring that all borrowers experiencing financial hardship are treated according to some common standards of assistance by lenders. The Principles, which apply in relation to all consumer credit contracts, establish temporary and standardised arrangements that are designed to assist borrowers that are unable to meet their contractual obligations due to unemployment or as a result of other (reasonable) causes.

SERVICE ONE will apply the following principles on a case-by-case basis to assist borrowers manage their way through temporary financial hardship. In these circumstances, SERVICE ONE will support their borrowers by:

1. Temporary assistance options

SERVICE ONE will provide temporary assistance to borrowers who are experiencing financial hardship and have become unemployed or are in difficulty more generally.

SERVICE ONE will work with borrowers to determine the most appropriate assistance option for each borrower. Options may include:

• in relation to mortgages, postponing the dates on which payments are due under the contract (with interest to be capitalised into the loan)
• extending the period of the contract and reducing the amount of each payment due under the contract
• reducing the limit available to customers on credit contracts
• offering different banking arrangements that will better suit the customer’s needs
• temporary overdrafts on a one-off and temporary basis to suit short-term needs
• providing interest-only repayment options on loans, and
• providing fee waivers.

These options will be considered in circumstances where the borrower will be able to meet the new repayment terms and will be able to meet their new contractual obligations in the long-run.

2. Identification of borrowers in hardship

• SERVICE ONE will have systems in place to assist in identifying borrowers who may be experiencing financial hardship.
• SERVICE ONE will monitor borrowers and may contact borrowers who default on their contractual obligations. If contacted, SERVICE ONE will explain, in detail, why an individual has been contacted and explain what assistance may be available to the individual if it is found that they are experiencing financial hardship.
• SERVICE ONE may contact customers that exhibit other potential signs of borrower distress, which may include:
  • unusual patterns of usage of credit card products, and
  • requests for significant increases in credit card limits.

3. Staff training

• SERVICE ONE will continue to have staff trained to deal with hardship cases in a sensitive and effective manner.

4. Information on hardship processes

• SERVICE ONE will maintain the mechanisms that are in place to allow borrowers to seek information about hardship assistance.
• Access to information about hardship processes will be open to borrowers without requiring borrowers to provide evidence of their hardship.

5. Timely assistance

• SERVICE ONE will continue to deal with requests for hardship assistance in a timely manner.
• SERVICE ONE will continue to ensure that hardship applications are dealt with as quickly as possible.

6. Financial counselling services

• SERVICE ONE will provide, where appropriate and subject to availability, details about external financial counselling services.

7. Needs-based assistance

• SERVICE ONE will continue to provide temporary financial hardship assistance based on information about the borrower’s individual needs.
• Borrowers who apply for temporary assistance may need to provide evidence of financial hardship. This will help credit SERVICE ONE develop tailored solutions for individual borrowers.
• Evidence of financial hardship can be satisfied through the provision of the following documents that show a change in their personal circumstances:
  • payslips
  • bank statements
  • medical certificates
  • welfare payment statements, or
  • a statement of financial position and/or income and expenditure.

8. Constructive approach

• SERVICE ONE will continue to work constructively with borrowers who experience financial hardship and will try to assist borrowers to overcome difficulties meeting their financial commitments. SERVICE ONE will do this whether or not the borrower has a right to seek a hardship variation or change under the consumer credit laws.
• SERVICE ONE will continue to consider longer term as well as short-term financial issues when they are relevant. If a Member is experiencing longer term difficulties, we will try to develop an appropriate solution with the Member to allow them to meet their obligations and improve their financial stability.

9. Responsible lenders

• SERVICE ONE will continue to act honestly and with integrity, and will treat borrowers fairly and reasonably, including borrowers facing financial hardship.
• SERVICE ONE will continue to act as responsible lenders.
• We base our lending decisions on a careful and prudent assessment of a borrower’s financial position. We promote the responsible use of credit to our Members.

10. Impact on wider community

• SERVICE ONE will continue to take account of the impact of their operations on staff and the communities they serve.