Lindorff Financial Services (LFS) is an intermediary and mediates in the establishment of credit contracts. These contracts are accommodated with a reliable partner with many years of experience with millions of consumers in the Netherlands. Lindorff BV, as a full receivables credit management organization, knows precisely how everything works in a situation of payment arrears. This allows LFS as part of Lindorff to correctly judge the situation of a consumer and offer a customized payment solution. A large number of families have a debt with a company or institution that they would want to pay, but are not able to in one go. Lindorff Financial Services is the first organization in the Netherlands that offers an alternative. The consumer is not heading into a collection process, but instead enters into a PaymentPlan. This way the company or the institution receives the outstanding balance in óne go and the consumer pays the loan back in installments with a credit compensation. John van Drunen, manager LFS: ‘We solve the problem before it réally becomes a problem. Besides, bringing in new costumers is usually more expensive for companies than retaining existing customers. Realising that last goal is receiving a new boost thanks to LFS.’
Customized payment solution
LFS, which launched in the fourth quarter of 2008, offers PayPlan exclusively to their partners. These are companies and institutions that have joined up with LFS. Often companies or institutions do not accept payment arrangements or the number of installments is limited. To administrate a payment regulation is labor intensive and definitely not a core activity of a company or institution. ‘If the payment does not arrive, then the service towards the consumer is suspended or even completely canceled’, explains Van Drunen. ‘Companies or institutions can even decide to hand out the claim to a debt collection agency, in which case debt collection and bailiff fees will significantly increase the original claim. Even though the consumer was still able to pay the bill in parts.’ With PayPlan LFS takes over the administrative mess of payment arrangements for a company. Additional advantages are amongst others cost reduction (fte), the focus on core activities, a boost in customer satisfaction and the budgeting of the receivable portfolio. In addition the company or institution offers an extra service by offering a customized solution to the customer. ‘Even badly paying customers can become properly paying customers in time’, predicts Van Drunen. ‘Our partner T-Mobile now actively directs its customers to LFS if they ask for a payment arrangement. A number of T-Mobile customers have now paid off their entire debt through the use of PayPlan. They simply pay in installments to our bank partner. Thanks to LFS the customer relation between T-Mobile and the consumer is preserved without T-Mobile having to do any administrative actions.’
The loan that LFS provides to the consumer, is not comparable to the loan of a bank. For banks lending out small amounts is not interesting. A consumer is only welcome for loans of €2.500,- or even €5.000,-. Through LFS a consumer borrows the exact debt amount. That way he is not tempted to borrow more than necessary. So they are responsible loans. ‘Loans from LFS are different’, says Van Drunen. ‘Your financing with LFS is strictly used to repay the accumulated debt with a company or institution.’ The consumer is receiving a loan with a credit limit and monthly repays an amount of minimally two percent every month. The lending fee which is due over the withdrawn amount, is added to the debit balance every month. Repaid amounts can not immediately be withdrawn again by the consumer. ‘The consumer will first have to show his or her good payment morality by paying on time. However, using PayPlan is a decision that a consumer makes and is never an obligation’, Van Drunen clarifies.
The consumer can convert the debt to a company or institution into a new loan (refinancing). LFS verifies the consumer strictly on solvency and checks if he meets the guidelines and regulations that have been drafted up by the Authority Financial Markets. ‘For every credit application a so called customer profile is drawn up. Information on income, monthly expenses and an assessment with the Agency Credit Registration are part of this process’, Van Drunen sums up. ‘LFS is participant in a system of credit registrations that are maintained by the BKR. An assessment with the BKR is a requirement and therefore fixed part of the acceptation process.’ However, LFS takes it one step further. The database of RiskSolutions (part of Lindorff), which is filled with positive and negative payment references of millions of consumers, is also used in the solvency assessment.