Councils could save thousands and reduce stress to debtors with digital debt collectionTopic: Public Sector
Esendex are proud to be exhibiting at the Institute of Revenue, Ratings and Valuation Conference in Telford this month (9-11 October), where our Public Sector team will be showcasing the digital debt recovery solutions we can offer local authorities
Debt collection can cause local authorities’ huge problems every year and stress to vulnerable people, which is why a new solution of moving debt collection digitally could reduce stress caused to both parties.
Local councils have traditionally used enforcement agencies to help them recover debts, with many councils struggling to recover the debt in full. Our new report suggests that giving people a more flexible and easier approach to paying, could see fewer debts, meaning less stress to the debtor, and councils spending less resources chasing outstanding debt – a win for both parties.
Outstanding council tax owed to local authorities in England as of March 2018 topped £3bn
We recently undertook a survey and found that a significant number of authorities were not keeping records on how much it cost when chasing late payments of council tax and business rates. There was no breakdown of internal spend or costs when involving external agencies.
68% of local authorities surveyed were not able to so whether the money they received outweighed the cost of retrieving it.
Local authorities are being scrutinised more than ever for the way they collect debts but there are multiple of ways that they can collect debt quicker and without hassle, with research showing that citizens respond much better to automated forms of debt collection, such as:
Text message reminders – With 98% of all messages being read you know your reminder will be read and without someone coming to their door, gives the debtor the chance to pay in their own time.
Online payment portals – Gone are the days of paying via post, secure online portals mean payment can be taken from anywhere in the world instantly.
Chatbots – A friendly approach to collecting debt that does not take up time of employees.
3 ways that allow people an easy solution to paying their debt at their own leisure.
Esendex have worked with many councils implementing solutions for debt collecting that help both parties. One of these councils saw a huge reduction in letters being sent, resulting in reduced costs, along with a drop of time taken to collect the payments. This customer now receives around 90% of council tax arrears payments digitally.
By using court orders and bailiffs, local authorities not only make it harder for the debtor to clear the debt, but increase the amount that is owed.
By automating the processes and giving the debtor a solution on how and when to pay, without having to incur fees or speak race-to-face, can reduce anxiety of it all and help them find a solution that suits them, rather than ignoring it.
If you would like to discuss how you could improve your debt collection, please call us on 0345 356 5758 and we can help you find a solution that best suits everyone. Alternatively download our whitepaper on debt recovery here.