When a company’s reputation is under attack is not the time for weasel words and clever phrasing to make the situation look not quite so bad.
Case in point is high-profile short-term lender Nimble, which must refund $1.5 million worth of what news.com called “dodgy payday loans.” Yet the company version of events and the official version from the Australian Securities and Investments Commission (ASIC) seem to be describing entirely different conclusions.
Here’s the beginning of the financial watchdog’s press statement: “Following a significant ASIC investigation, payday lender Nimble will refund over 7,000 customers more than $1.5 million after ASIC had concerns that Nimble was failing to meet its responsible lending obligations.”
Here’s the opening sentence of the company press statement: “Nimble announced today that it has reached an agreement with the Australian Securities and Investments Commission (ASIC) to resolve some application assessment issues affecting a small number of customers.”
Notice anything different?
And here’s some results from ASIC’s investigation: “ASIC identified significant deficiencies in Nimble’s compliance with the responsible lending laws when providing loans of short duration to consumers …. Nimble had not properly assessed the financial circumstances of many consumers before providing them with loans …. Nimble did not take sufficient or appropriate steps as required by law before providing a loan to the consumer.”
And how did the company represent that? “There has been no adverse findings against Nimble.” The company went on to say: “Nimble supports improved financial literacy and will make a donation of $50,000, plus any unclaimed monies to Financial Counselling Australia.” No mention of the fact that it is “required” by ASIC to make such payment.
Of course there are different ways to present “the facts,” but how does this approach help restore confidence and reputation. And after ASIC’s damning report you might think some remorse would be in order from the company which news.com described as being “savaged by the securities regulator.” Maybe an apology? Or expression of empathy for the victims of its action?
No such luck. Nimble’s CEO said he “regrets any inconvenience caused to the affected customers.” Really? Managing Outcomes has commented often before that bland expressions of regret may keep lawyers happy . . . but they are no substitute for a genuine, heartfelt apology.
We will probably never know the thinking behind the company’s strategy and we can only judge from their formal statement. But we do know from research that this approach is less likely to restore reputation or promote acceptability to the public. While the high-interest payday lending sector is certainly no-one’s favourite industry to start with, reluctance to fully accept responsibility when caught out not doing the right thing provides a lesson to issue and crisis managers everywhere.