Currently in the UK, both businesses and consumers are becoming greatly at risk from our debt habits. A comparethemarket.com survey revealed 9 out of 10 consumers suffer from stress and anxiety as a direct result of their debt issues, a concerning statistic that highlights the need for ethical debt collection techniques.
Delving further into the survey results, we find that 45% of the consumers surveyed are currently in debt, with one in four consumers using credits cards just to get by each month.
However it is not just credit card debt that is contributing to the figures, debt charity Money Advice Trust the National Debtline, states that council tax was one of the fastest growing types of debt,
“Local authorities need to intervene as early as possible to ensure that people struggling to pay their council tax receive the free debt advice they need – as well as agreeing repayment arrangements that are affordable and sustainable,” Joanna Elson, CEO, Money Advice Trust.
In 2018 Citizens Advice helped 96,000 people with council tax debit problems and 67,000 people with credit card problems. With thousands of those consumers experiencing heavy-handed collection tactics with bailiffs and prison sentences being issued.
The Chef Executive of Citizens Advice Gillian Guy, states “It’s a huge issue for those in financial difficulty, falling behind on a council tax bill can lead to serious consequences and send debts spiralling. The government must look at the rules that oversee council tax collection to encourage local authorities to use less heavy-handed tactics when collecting arrears.”
Another concerning statistic highlighted in the same survey states that, 1 in 4 consumers don’t know how much debt they are in, calling for better communication, updates and understanding of their debts.
Of course this is a massive issue for consumers, but alternatively debt collection is a massive problem for businesses too, with many councils, utility providers, financial services and businesses trying to find effective ways to collect debt for all parties and provide payment options for consumers that are manageable.
This where communication and accessibility can help.
Where paper-based communication can fail, digital and SMS can excel. With no distractions and instant communication displaying all the information that is needed and methods to make payments, the digital solutions are helping to collect debt.
With digital letters and e-billing local governments can reduce the costs of correspondence and their carbon footprint by switching from paper to digital letters. While automate the sending of new council tax bills using SMS and emails will minimize time spent on administrative tasks.
Our mobile solutions can help collect debt, but also give consumers the perfect familiar communication channel for them to be able to make payments and keep on top of their payments.
“Esendex have managed to construct and successfully deliver a cost effective solution that allows significant value to be found in pursuing small debt amounts.”
RICHARD DIXON – CAPABILITY AND DELIVERY MANAGER – NPOWER
Our debt collection solution for utility provider npower increased their final debt payments from 4% to 19%, with an astonishing 82% of payments being made for the full amount.
Through SMS, mobile journeys, mobile payments and SMS landing pages, we can deliver the perfect debt payment solution that not only works for the consumer, but also the business.
If you would like to know more – please do get in touch today.