What FIs need to know about product refunds and automation
The management of vehicle protection product refunds is a complex, manual process. This blog lays out some hurdles, misconceptions, and solutions for FIs as they manage product refund liability.
Class action lawsuits against large, well-known lenders are bringing increased attention to ancillary product refunds (like GAP, Tire & Wheel, and AD&D.) Despite the many challenges of managing these product refunds in-house, the legal and reputational risks are raising the stakes for how FI’s internally accept ownership of the refund process.
4 hurdles of internally managing product refunds
- Finding Talent: Labor rates make it more costly than ever to hire top talent. Across the industry it is increasingly difficult to source and retain human talent. Managing the product refund process typically requires one full-time employee per 200 product cancellations per month. The more loan volume your portfolio holds, the more FTEs required to stay current on refunds.
- High level of knowledge: If you can find the talent, employees must then be trained to manage product refunds. This requires a high level of working knowledge, and many FI managers aren’t well-versed in it to provide adequate training.
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