FNS40120 Certificate IV Credit Management Assignment

Task 3.1      Identifying and improving client service standards

Question 1a

Think about your job role and the tasks you routinely perform. Consider how they impact on your organisation’s clients.

List at least three (3) of the tasks you perform below and describe how they impact on the client. (100 words)

Describe the standards of performance required by your organisation when you carry out the tasks identified above. The standard may be a service level agreement which sets out the expectations for the services to be delivered within a certain time frame. (75 words)

Explain the monitoring that takes place (or could take place) to determine if the standards of performance are being met. (75 words)

Question 2a

Identify at least one (1) task you (or a colleague) routinely perform that is monitored by the organisation and could be improved in some way.

Describe the task. (50 words)

Question 2b

Explain how the task could be improved and how the improvement would benefit the client. (75 words)

Question 3a

Note: The following activity may require that you carry out research within your organisation, beyond your immediate work area. If you are not currently working, conduct your research on an organisation within the credit industry.

Id  entify and describe one (1) of your organisation’s client segments. (30 words)

Question 3b 

Identify the data that the organisation collects on this client segment. (75 words)

Question 3c 

How is this data used (or how could it be used) to improve the service delivered to clients in the identified segment? (75 words)

Question 3d 

What additional data (or ways of using existing data) can you identify to further improve service offered to clients in this market segment? (75 words)

Question 3e 

Credit institutions use a range of different databases and systems to perform credit and administration tasks. (50 words)

Identify three (3) financial systems and/or databases and their uses by completing the table below.

Question 4a 

There is a variety of client groups who have special needs of some sort. These needs might involve language, ethnic origin, socioeconomic considerations, geographic location, etc.

Identify one (1) of your organisation’s client groups which has a special need or needs. Describe the need or needs of this group. (75 words)

Question 5a

Customer service standards are usually very important in any organisation.

In your job role and in referring to the organisational policy and procedures document in the Toolbox, describe how you comply with the standards. (75 words)

Question 5b 

(i)        Describe your contribution to monitoring and improving service standards to better meet the needs of customers.

(ii)       What review process is in place to analyse customer feedback? What process is in place for recommending adjustments to service standards to improve the customer experience? (75 words)

Task 3.2      Resolving client complaints

Question 1

If a complaint or dispute is presented to you, the first step is to establish that there really is a valid dispute to resolve. (150 words)

(a)       Outline three (3) possible grounds for dispute.

(b)       Identify two (2) reasons that you may need to refer a complaint to other personnel.

(c)       What are the possible implications for both customers and the organisation if issues are not resolved? (Name one for each.)

Question 2

(a)       Outline the role and process the Australian Financial Complaints Authority (AFCA) follows to resolve complaints.

(b)      What other body can a consumer complain to if they have an issue with an organisation regarding competition and fair trading?

(c)       Briefly outline the role of the body in b) and the legislation it operates under.

           (100 words)

Read the following scenarios and then answer the questions that follow.

Scenario 1

You have taken a call from a client, Mr Robert Natalie. He is complaining because he has received his latest loan statement (loan account 12-987-3214) and has noted that the interest rate has increased by 0.25%.

Mr Natalie claims he was promised his rate would not increase for at least 12 months and he is only six months into the loan.

You investigate and find that the rate rise is in line with a recent general interest rate rise.

You cannot find a record of an agreement with the client to keep their rate unchanged for 12 months.

Mr Natalie is upset and unhappy.

Question 3a

What communication and interpersonal skills might you use at this stage of the interaction with Mr Natalie? (40 words)

Question 3b

This issue has now turned into a complaint. Refer to the organisational policy and procedures in the Toolbox under Dispute resolution policy. (200 words)

(i)        In line with the organisation policy, what steps would you take next?

(ii)       Provide two (2) possible options that you could offer to Mr Natalie to resolve the complaint.

(iii)      What will happen as a result of his complaint and what are Mr Natalie’s options if he is dissatisfied with the response from your organisation?

(iv)         complete the Dispute resolution register for this scenario.

Further information

Mr Natalie is adamant that he was told he would have no rate increases for 12 months and wants the matter investigated.

Question 3c

Mr Natalie is not satisfied with the decision of your organisation’s IDR and has decided to refer the dispute to the EDR committee.

Your task is to prepare the documentation for this unresolved dispute which has been referred to formal conciliation services/EDR. You will complete the first five (5) columns of the Dispute escalation register which is located at the end of Question 3d. (50 words)

Question 3d

On 11 March 2019, the EDR committee made a decision. Based on verbal agreement and conversation with his banker, the EDR has ruled that Mr Natalie will have a 0.25% p.a. discount applied to his loan.

(i)        Record the EDR outcome on the dispute escalation register below (column 6).

(ii)       What steps would you take to act on (process) this decision?

(iii)      Which stakeholders would you advise of the outcome and how would you notify them?

            (75 words)

Question 4

Scenario 2

You are processing a loan application for Jenny Jones. The application is in its final stages and everything should be in order. However, you notice that guarantor documentation has not been correctly executed. Specifically, there is no statement from an appropriate person, such as an accountant or solicitor, confirming that the implications of providing a guarantee have been explained to the guarantor and that the applicant appears to understand.

You call Jenny Jones and explain the situation, asking her to provide the appropriate documentation.

Ms Jones is angry. She says that the loan money is needed now and that nothing was said about the need for the additional documentation when the application was lodged. She demands that the application be finalised immediately without the additional documentation.

You cannot comply with her request as it would breach your organisation’s policy and procedures, as well as regulatory codes.

Outline the guidelines, techniques and strategies you would use to manage this complaint. (100 words)

Task 3.3      Dealing with loan defaults

Question 1

The National Credit Code (NCC) sets out certain events that must occur and steps that must be followed by the creditor in the case of default. Briefly explain those events and steps. (80 words)

Question 2

What factors might be considered and documented when determining whether it is appropriate to write off and close a delinquent debt? (50 words)

Question 3

Read the following scenario and then answer the question that follows.

Your organisation has identified an account which is significantly in default. Initial contact with the client has failed to lead to a satisfactory resolution. The loan is covered by the NCC.

In the course of investigating the default, it has been discovered that the client provided forged evidence of employment and income to support their loan application.

Do the events and steps identified in the specific requirements of the NCC, as in Task 3.3 Question 1, apply in the situation described in this question? Explain why/why not. (40 words)

Question 4

(a)      With reference to the Organisational policy and procedures document (available in the Toolbox)
explain the organisation’s policy for managing overdue accounts and its loan default recovery policy.

(b)      Outline a minimum of three (3) techniques that can be used when managing overdue accounts to identify loans at risk of default.

           (75 words)

Task 3.4      Initiating legal action

Question 1

Read the following scenario and then answer the question that follows. (100 words)

A debtor in default has been issued with a notice of demand. They have not responded and all attempts to contact the client and reach a satisfactory resolution have failed.

The creditor has decided to take legal action to recover the debt.

(a)      Describe the typical process that would now be put in place to recover the debt (i.e., describe the steps involved).

(b)      Outline the stakeholders, personnel and correct level of approval authority that would need to be involved and notified to initiate legal action.

Question 2

(a)      Explain a lender’s three (3) options for debt recovery.

(b)      Provide an overview of possible outcomes of legal proceedings.

(c)       Name two (2) types of service providers the bank may engage to help with the recovery process.

           (80 words)

Question 3

During the legal process it is important that reports are monitored and accurate records are maintained.

Refer to the Toolbox for the AB Bank legal proceedings report. Review this report and record the outcome of legal proceedings for the following cases:

•   A Ratten

•   M Cornish

•   S Nash

AB Bank legal action progress register

Task 3.5      Promoting the effective use of credit

Read the following scenario and then answer the questions that follow.

Sonya is a single parent. She is returning to the workforce after time spent looking after her young child. She needs to buy a car to get to and from her new workplace.

In the past, her former partner managed all the household finances, but now she has to decide how to finance the purchase of the car. She has insufficient funds to buy it outright.

Sonya comes to you for advice on credit and the best way to finance the purchase of the car. It is likely to cost about $15,000. She would prefer to obtain finance for the whole amount. Assume that her income will be sufficient to cover repayments.

Question 1 

What communication skills might you use to establish and confirm Sonya’s level of knowledge about credit and finance and to establish her needs? (30 words)

Question 2

What type of credit options would you suggest to Sonya and why? 

Your answer should include a comparison of two (2) credit options and a recommendation of one (1) option with reasons for the recommendation. (75 words)

Question 3 

Provide a simple explanation of the difference between a secured loan and an unsecured loan to Sonya with respect to her needs. In your explanation, include the implications of taking out a secured loan. (75 words)

Question 4 

Provide Sonya with a summary of fees and charges that might apply to the credit option you have suggested. (30 words)

Question 5 

Explain to Sonya how she can compare the real cost of loans offered by different credit providers. Explain why your suggestion is likely to provide an indication of the real cost. (50 words)

Question 6 

Sonya tells you that her former partner failed to properly meet their credit card debt obligations before they parted. Although Sonya eventually repaid the debt, she is afraid that this incident may count against her when she applies for a loan.

What would you tell Sonya about the records kept by credit reporting bodies, how they are used, and her rights regarding her access to the information they hold? (80 words)

Question 7 

What information and advice would you give Sonya about her plan? (50 words) 

Question 8 

Overall, what advice would you give Sonya about the debts she intends to incur and the possibility that she might default on her obligations? (30 words)

Task 3.6      Industry

Question 1

(a)      Identify four (4) client sectors of the financial services industry and briefly outline their role.

(b)      Choose two (2) of the sectors outlined in a). Explain the interrelationship between the two sectors.

            (100 words)

Question 2

(a)       Read the article in the Toolbox on ‘debt management reform’ to gain some insight on recent changes to the NCCP Act that require debt management services to hold a credit licence. Based on this change, outline two (2) activities that will now require a credit licence.

(b)      Identify three (3) types of business that may be identified as a debt repair management service.
Explain the types of services they provide.

           (100 words)

Question 3

(a)       Refer to the Australian Prudential Regulation Authority (APRA) website and then outline its role and relationship with banks.

(b)      Identify and explain two (2) organisational policy changes that could be made to reflect changes introduced by APRA.

           (50 words)