Working with customers
With the recent spate of layoffs and many families buckling under the weight of the recession, some Barbadians are struggling financially to meet their monthly obligations.
Customers have been juggling payments while companies have been reorganising to accommodate those affected by financial troubles.
The Barbados Light & Power (BL&P) is one utility company that has seen a spike in late payments from several of its customers in recent months.
“Many of our customers are challenged to meet their commitments in Barbados’ current economic environment, and electricity bills are no exception. We have seen an increase in the number of late payments by our customers, and we continue to work with them to find ways to help them keep their bills current so that we can avoid service disconnections,” BL&P said in a statement.
“It is important for BLPC that customers pay their bills on time so that we can meet our own obligations to our fuel and other suppliers in order to continue to provide safe and reliable electricity service to our customers.”
Instead of rushing to interrupt their services, many utility companies are trying to work with customers who are on the edge financially. Some companies have put measures in place to work with customers that are struggling.
“LIME has not seen an increase in delinquency or bad debt. Neither has there been a decrease in customers,” LIME said in a statement.
“As is customary, for customers who are experiencing difficulties in making payments we will continue to work with them in agreeing on a convenient and reasonable arrangement to settle any outstanding invoice balance,” the LIME statement continued.
The National Petroleum Corporation has escaped the problem of delinquency since its bills are typically low.
“We haven’t seen any upsurge in delinquency among our customers,” said Birchmore Scantlebury, manager of finance at the National Petroleum Corporation (NPC).
“We have a strict policy of disconnection after one month in arrears,” he said.
While NPC might be faring better than most, companies like the Barbados Water Authority will be monitoring its customers’ bill payment over the next few months to track any delinquency trends.
“We’ll be setting up a system that will monitor the bill payment trends of our customers,” said BWA’s corporate communications specialist Joyann Haigh.
“If upon review of that system we notice any customer delinquencies or late trends we will be looking to work with those customers to ensure timely payment of bills,” she said.
But utility companies aren’t the only ones taking a hit. Banks, particularly in the area of mortgages, have seen a slide among customers in their ability to repay.
“There has been a noticeable increase in late payments or deferral of payments,” said Glyne Harrison, president of the Barbados Bankers’ Association.
The delinquency has had some impact on the portfolio. Most banks are trying to manage it by working with customers.
“We have to keep our hands on it and keep working with the customers so the situation doesn’t become too problematic,” he said.
One of the scariest things for homeowners who cannot pay their mortgages is the looming threat of foreclosure.
“As a community we don’t want to be putting people out of their homes. That is always a last resort,” Harrison stated.
“Sometimes we can work with customers to change up the terms of their mortgage which would be how much and when you can pay,” Harrison explained.
Republic Bank of Barbados is one financial institution that established a financial care unit when the Government announced that there would be public sector layoffs. It was to provide financial guidance to those who may have been affected.
“Based on the history of the Barbados National Bank and more recently Republic Bank, we have had a close relationship with the Public Service in terms of providing banking support,” said Ian De Souza, managing director and chief executive officer of Republic Bank.
“What we have seen with the downturn in the economy is that there has been a bit of an increase in delinquency in payment due to job losses.”
According to De Souza, while his institution hasn’t seen too many dual job losses among breadwinners in a household, it had seen job losses with the single breadwinner.
“You give the persons time to regain some form of income,” De Souza said. “What would have happened to these people is not of their doing or their choice. Truth be told, there are situations when all else fails and you are faced with the unfortunate circumstances when nothing else is possible and you have to look at selling the property. That’s the ugly part of banking that none of us like.”
To offset the possibility of foreclosure De Souza said that Republic tries at all levels to work with customers displaced by unemployment.
“Our posture is one of as much caring as possible. We work with customer in terms of rearrangement of loan repayment schedules. You might have to do things on a temporary basis. If you have a two-income family you can’t put all the burden on one person. We would reschedule the mortgage and put it back on track later,” he said.
“Sometimes we look at the customer’s asset and liability situation. If the customer has some asset, we might advise them if they have an extra piece of land to use that to reduce the mortgage debt. Our business is about putting people in homes rather than taking homes away from people.”
Banks expect customers to be upfront about any changes in their financial situation since this shows a willingness to honour their debts.
“Customers should contact their banking representative once there are any changes and you let your circumstances be known. That’s the first step to getting help. Don’t keep it to yourself and try to work it out on your own, he advised.
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