Point of Sale Consumer Finance In-store (Customer Present) Credit Application Process v2.0 Copyright Close Brothers Retail Finance 2016. This document contains the proprietary information of Close Brothers Retail Finance and may not be reproduced in any form or disclosed to any third party without the written permission of a duly authorised representative of Close Brothers Retail Finance.
Table of Contents Table of Contents... 2 Introduction... 3 The CBRF Finance Calculator... 3 Figure 1: CBRF Finance Calculator... 3 Figure 2: In-store Quick Launch utility... 3 The Credit Application Process... 4 Figure 3: pre-qualification... 4 Personal Details... 4 Figure 4: personal details... 4 Address, Employment & Banking Details... 5 Figure 5: address, employment and bank account details... 5 Customer Consent... 5 Figure 6: search consent... 5 Pre-contract Credit Information Video... 6 Figure 7: interactive pre-contract video... 6 Pre-contract Credit Information & Direct Debit Mandate... 7 Figure 8: pre-contract credit information and direct debit mandate... 7 Credit Agreement & E-Signature... 8 Figure 9: credit agreement and e-signature... 8 Deposit Confirmation... 9 Figure 10: deposit confirmation... 9 Purchase Complete & Apply Faster Next Time... 9 Figure 11: purchase complete... 9 Shadow Limits... 10 Figure 12: Shadow Limit... 10 Figure 13: Shadow Limit order amendment... 10 Multi-tier / Multi-lender... 11 Figure 14: example CBRF multi-tier decision policy... 11 Figure 15: multi-tier / multi-lender screen... 11 Referred Applications... 12 Figure 16: refer response... 12 Declined Applications... 12 Figure 17: decline response... 12 Appendix 1: Credit Application States... 13 Figure 18: credit application states... 13 Close Brothers Retail Finance Page 2 of 13
Introduction This document outlines the process that enables customers to apply in person for point of sale credit products. The process is designed to be secure and efficient. At the same time it is quick and simple for customers and easily implemented and managed by retailers. The process complies with all relevant legislation including the Consumer Credit Directive (2010). The in-store credit application process is a component of Close Brothers Retail Finance s consumer point of sale finance solution, which also includes the following: The CBRF Finance Calculator - a powerful in-store sales tool that assists retailers in presenting finance options to customers An online credit application process a comprehensive online credit application process, designed to be seamlessly integrated into your website Application Programming Interfaces (API s) to assist retailers to automate credit application processing CBRF Retailer Portal - A web based account management and reporting system The in-store process works across all hardware options and is supported on Macs, PCs and full size tablets. The CBRF Finance Calculator The in-store process begins when a customer selects a finance offer presented by the retailer, using the CBRF Finance Calculator or in-store Quick Launch utility. Figure 1: CBRF Finance Calculator The CBRF Finance Calculator runs in a web browser and can be accessed by in-store authorised users from within CBRF Retailer Portal. Using the finance calculator you can present up to four finance options to the customer. For example giving them the option to repay over 6, 12, 24 or 36 months. When you move the price and deposit sliders, the finance details are instantly calculated and displayed. Close Brothers Retail Finance Page 3 of 13
Figure 2: In-store Quick Launch utility Clicking Apply Now displays a confirmation screen where the retailer can enter a description of the goods and optionally, a reference, before launching a new credit application form for the customer to complete. Close Brothers Retail Finance Page 4 of 13
The Credit Application Process The credit application form is now displayed. The form has been carefully developed to present correctly on a range of devices including desktops and laptop computers as well as full size tablets. The description of goods, deposit and finance details are displayed in the credit summary in the header throughout the application process. The footer contains links to information referred to during the application. Each link opens in a new browser window, sized and positioned to not obscure the application behind. To begin, the retailer confirms the sale particulars and that the customer is eligible for finance. Figure 3: pre-qualification Personal Details The customer is prompted to enter their personal details as shown below. Date of birth must be selected from a drop down menu. Underage customers cannot proceed beyond this point. Email address is captured and confirmed. Finally we record the customer s permission to sign the application and agreement on screen. Validation confirms that all fields are complete to the agreed syntax, the email address is legitimate, that both email fields match and that the checkbox statements are ticked. Validation is shown with a green tick beside each field. Close Brothers Retail Finance Page 5 of 13
Figure 4: personal details Close Brothers Retail Finance Page 6 of 13
Address, Employment & Banking Details The customer is prompted to enter the first line of their address and it is automatically recognised using the Postcode Anywhere database. In the unlikely event that the customer can t find their address it can be entered manually. The customer is then prompted to select the number of years at this address. If they select less than three years, a previous address entry form appears. The form automatically captures up to three previous addresses. Figure 5: address, employment and bank account details Then employment and bank details are captured and validated. The bank account number and sort code is validated and referenced using the BACS Extended Industry Sort Code Database (EISCD). The account name is matched to the applicant surname (non case sensitive surname match). This enables us to populate the direct debit template once approved with the relevant bank branch details, verify that the account can accept Direct Debits and that the account name, applicant surname and applicant address return a positive match. Customer Consent The customer is now prompted for their consent to perform a credit search. Figure 6: search consent The customer must tick the checkboxes to grant their consent before they can proceed. Close Brothers Retail Finance Page 7 of 13
Pre-contract Credit Information Video If the application is approved, the customer is now invited to view a short video that explains the key features, costs and important legal information about the credit product. They can pause the video at any time and replay it as often as they wish. A finance information pane is displayed to the right of the video. The customer must watch the video before they can proceed to the next step. Figure 7: interactive pre-contract video Upon the retailer request and with the consent of the lender, the pre-contract video can be substituted for a script that is read out by the salesperson, which includes the same points covered in the video. Close Brothers Retail Finance Page 8 of 13
Pre-contract Credit Information & Direct Debit Mandate The pre-contract credit information and direct debit mandate is now presented to the customer in a single scrollable page. The customer is prompted to review the pre-contract credit information and must tick a checkbox to confirm they have done so. Figure 8: pre-contract credit information and direct debit mandate Next the customer is presented with a completed Direct Debit mandate. We ask the customer to tick a checkbox to confirm that they are authorised as a sole signatory on the account and that they authorise the creation of the direct debit mandate. Close Brothers Retail Finance Page 9 of 13
Credit Agreement & E-Signature Finally the customer is prompted to review and sign their credit agreement by ticking a checkbox beneath. Figure 9: credit agreement and e-signature Close Brothers Retail Finance Page 10 of 13
Deposit Confirmation After the consumer has submitted their completed application, the retailer must confirm that they have taken a deposit from the customer using a Chip and Pin authenticated credit or debit card. Figure 10: deposit confirmation If the deposit is taken by any other means, or if the deposit is zero, the retailer must also request a proof of identity from the customer. Accepted proofs of identity are specified in the retailer procedure guide. An image of the customer s identity document can be uploaded directly via this screen. To complete the process the retailer clicks Verify Application. If the customer is taking the goods away there and then, the retailer can tick the checkbox to fulfill the application. This automatically adds the application to the settlement file that is paid on the next working day. Shadow Limits Shadow Limits offer suitable consumers a higher borrowing limit. The Shadow Limit logic is contained in the lenders credit policy and can be conditional on other attributes and values. Figure 12: Shadow Limit If the consumer is eligible, the Shadow Limit decision screen is displayed (prior to the pre-contract video step see figure 7) to inform them that they have been approved for a high borrowing limit. The consumer can then elect to amend their order or proceed with their original order. Close Brothers Retail Finance Page 10 of 13
Figure 13: Shadow Limit order amendment If the consumer wishes to take advantage of the Shadow Limit, the order amendment screen is displayed. Before they can proceed, the consumer must tick a checkbox to confirm the increased borrowing amount and the affordability statement. The process then resumes at the pre-contract video step (see figure 7). Close Brothers Retail Finance Page 10 of 13
Multi-tier / Multi-lender The multi-tier / multi-lender concept enables retailers to increase acceptance rates by presenting consumers, who would ordinarily be declined, with an alternative finance offer. The multi-tier concept works by mapping 1 or more alternative finance offers, which are presented to the consumer if they are declined for the initial offer. The Close Brothers Retail Finance Decision Policy component (specific to each retailer) defines the sequence and logic in which alternative finance offers are presented to customers who are declined for their initial choice. In the example table below, if the customer is declined for the 24 month interest free deal, the Decision Policy will automatically cascade the application and attempt to approve the customer on each mapped offer in the sequence. Description Finance Product Name Product Code Maps to Product Code Prime 24 Months Interest Free Credit (0% APR) ONIF24 ONIB24-9.9/N Near Prime 1 24 Month Low Rate Credit (9.9% APR) ONIB24-9.9/N ONIB24-19.9/N2 Near Prime 2 24 Month Classic Credit (19.9% APR) ONIB24-19.9/N2 ONIB24-29.9/S Sub Prime 24 Month Classic Credit (29.9% APR) ONIB24-29.9/S DECLINE figure 14: example Close Brothers Retail Finance multi-tier decision policy If the customer is approved for an alternative finance offer, they see the following screen. Figure 15: multi-tier / multi-lender screen The consumer can then accept or decline the alternative offer. If they accept the alternative offer, before they can proceed, they must tick a checkbox to confirm the changed loan parameters and the affordability statement Close Brothers Retail Finance Page 11 of 13
Referred Applications If the system cannot return an instant decision, the application is referred to an underwriter for manual review. This normally takes just a few minutes, however for applications received after 8pm or during especially busy periods a decision may not be returned until the next working day. We notify both the retailer and the customer by email immediately when a decision is returned. Figure 16: refer response Our database records the status and each change as it occurs. This means that the customer will always see the correct and relevant message regardless of their route through the process. Declined Applications If the application is declined the retailer prints a decline letter that gives the customer further information. Figure 17: decline response The same information is also emailed to the customer. Close Brothers Retail Finance Page 12 of 13
Appendix 1: Credit Application States Credit application states are defined as below. Initialise Pre-decline Accept Decline Refer Verified Fulfilled Complete Cancelled Amended Info Needed Error Action Customer Action Retailer Action Lender Resubmitted A credit application is initiated by the retailer The credit application has been declined by CreditSentry before submission to the credit bureau The consumer submits the credit application and the lender responds with an ACCEPT decision. ACCEPT decisions are valid for 90 days. The credit application is submitted and the lender responds with a DECLINE decision The credit application is submitted and the lender responds with a REFER decision The consumer has successfully paid their deposit using a credit or debit card (or in the case of zero deposit, the retailer the application has been validated by the retailer or other means) The retailer has notified Close Brothers Retail Finance that they have fulfilled the order. Fulfilment is defined as consumer having receipt of the goods/service(s). The credit application has been included in a settlement payment from the lender to the retailer The credit application has been cancelled The credit application has been amended An underwriter requires additional information before the credit application can be decisioned. The credit application could not be processed. One or more CreditSentry flags has triggered and a proof of identity has been requested from the applicant. One or more CreditSentry flags has triggered and the applicant has made two failed attempts to provide a valid proof of identity. The retailer may now elect to proceed or cancel the application. A CreditSentry flag of type forceid_check has been triggered and the applicant has made two failed attempts to provide a valid proof of identity. The lender may now elect to authorise or cancel the application. 89 days have elapsed since the application was last accepted and the application has not been resubmitted more than once previously. Figure 18: credit application states We send a CSN whenever there is a change in the status of a credit application. For example when an applicant is accepted/declined/referred or when they make a deposit payment (Verified). We also send a CSN to acknowledge fulfilment, completion (settlement) and cancellation requests. Close Brothers Retail Finance Page 13 of 13