Dealing with debt-stressed clients

For many the shame attached to not being able to keep up with their debts can be all consuming. I can understand this, as no one wants to feel like they are failing or losing control.

For many, confronting a debt problem can be as hard as admitting to an addiction. By the time a debt stressed client talks to a broker many of their debts may be heavily in arrears making a refinance tough and, in some cases, impossible given the current market.

Handling a stressed-out client can be very difficult as by this stage many people are not thinking clearly and are often looking for people to blame for their situation. Often when a broker says “I’ll do my best to help you” what the client hears is “I can definitely help you” and this can lead to some uncomfortable and even confrontational situations, as if all doesn’t go to plan, a desperate client will often blame their broker for not being able to magickly fix their problem. Of course, it isn’t logical, but stressed people often behave illogically, and brokers often take the brunt of this.

Unfortunately, this has resulted in a number of unfounded complaints being made to the Financial Ombudsman and other industry bodies against brokers. While most such complaints are baseless, they can cause significant stress and even costs for the broker.

Dealing with a debt stressed client can be a balancing act between being sympathetic to their situation and at the same time, remaining professional and focused on the future, not the past. This can be a challenging juggle to say the least. Let’s look at a few ways to help manage a debt stressed client.

Your client’s debt problems are not your fault
There is a difference between being sympathetic to your client’s situation and becoming consumed by it. Remember, your client most likely had their debt issues before coming to you.

While they’re no doubt looking for a shoulder to lean on, what your client really wants is a strong, calm and professional person to help them.

While understanding what happened to cause the debt issue is important, once understood your focus should be on resolution, after all, you are a mortgage broker, not a financial councillor and your clients need to understand the difference. Please don’t think I am saying you should be cold or uncaring, far from it. Connecting with your client is very important however continually talking about the past can be exhausting and unproductive and you’re going to need all your energy to focus on getting the loan across the line. Don’t be afraid to remind your client of that if need be.

Put everything in writing
Keeping good records is always important but is particularly so when dealing with stressed clients. When people are under pressure, they will often only retain parts of a conversation and this can lead to misunderstandings which can very easily lead to confrontation if not correctly managed. A stressed-out client can quickly become unreasonable and problematic if they feel they have been misled and unfortunately in some cases, anything short of their problem being resolved can leave them feeling misled, which is why keeping good file notes and emails is so important. In most cases you’ll never have to reference these, but on that odd occasion when your irate client is accusing you of wrongdoing it’s helpful to be able to refer them to something in writing that supports your version of events.

Written information becomes particularly important when dealing with third parties such as the Ombudsman so keep good records. If it’s important enough to tell your client, then it’s important enough to put in writing.

Keep your client informed
Remember, your stressed-out client is looking to you to be their white knight. Regular client contact goes a long way to helping them feel better about their situation. A simple email to let them know you’re still waiting to hear from a lender can be very powerful. Instead of them worrying about what’s happening they’ll take comfort knowing you’re in their corner. Even if you don’t have much to say, a short one-line email can be the difference between a happy client and one that calls you demanding to know what’s happening. An email trail can also be very powerful if you’re ever accused of not keeping your client updated.

Be quick to deliver bad news
No one likes to be the bearer of bad news. It’s human nature to hold off telling a client the wheels have fallen off their loan however in the case of a stressed-out client, letting them know all is not well is absolutely critical. Yes, you’re probably going to cop some grief, after all, you guaranteed a good outcome, right? Of course not, however your client might think so!

The last thing you ever want to be accused of is making your client’s situation worse and while it would never be your intention, delaying the delivery of bad news could do just that. Even though you may not have a happy client, at least they can look at other options sooner rather than later as later often means higher debts given the accumulation of interest and fees.

The fact is, sometimes you will end up being the bad guy when all you ever wanted to do was help.  Stress can bring out the worse in people and in desperation they may lash out at the very people that are trying to assist them. Most debt stressed clients aren’t bad people, they’re good people caught in a bad situation.

As a mortgage broker you’re in a unique position to add real value and change lives for the better, just remember that in the case of debt stress, emotions often run high so make sure you manage your client accordingly.

John Dickinson

DebtX