As a market leader in debt management, we are witnessing first-hand the devastating financial impact Covid-19 is having on the personal finances of so many people.
We wanted to better understand the person at the other end of the phone and commissioned research supported by StepChange debt charity to help us see first-hand the impact that debt is having on lives and mental health during the Covid-19 crisis.
Having empathy at times like this is important to us. The findings of our research challenged us to create an even more human-centric approach to our debt collection operations. The study has prompted us to take a good look at our operations and ensure that every person is treated with the empathy and fairness they deserve. We’ve invested heavily in technology to enhance our service offering for our clients so that they can easily identify vulnerable customers, create tailored customer journeys across multiple channels and ensure their customers are treated as individuals.
Even before Covid-19, problematic debt was on the rise in the UK, with more than 600,000 people contacting StepChange for help in 2019 alone. Now with rising unemployment due to the pandemic and the ongoing use of the furlough scheme, more people than ever are struggling with debt, many for the first time, and due to no fault of their own.
According to Citizens Advice Bureau, 6 million people have fallen behind with their household bills since March 2020. And the Centre for Mental Health estimates that half a million more people in the UK may experience mental ill health as a result of the pandemic.
Our study found that being in debt, especially for the first time, can give rise to strong feelings of shame and anxiety. Almost three quarters (71%) of the people we surveyed admitted that they were under stress because of debt, and this rose to 78% among respondents who were in difficulty for the first time.
One important finding is that not everybody is comfortable taking a call from a collections agent and that many people actually prefer using self-service digital channels. It’s important to give people options for how and when they will be engaged about their debt situation. In response to this trend, during the pandemic we have increasingly used digital channels to meet our customers’ needs and improve customer experience, allowing them to interact how and when they want.
Other people feel more supported with human interaction and want to be held by the hand as they walk through one of the most difficult experiences of their lives. Our study found that many people are too ashamed to reach out and are looking for organisations to make the first move and engage with them about their debt. These findings have helped us to evolve and transform our collections customer service operations to a more human-centric approach, placing the person at the heart of every interaction and everything we do.
We also found that people who had been dealt with fairly and with empathy in their time of crisis were more likely to remain loyal in the future, which shows that the human-centric approach is not just good for customers – it makes business sense too.
Creating a human-centred approach to collections is not straightforward: it takes highly trained and skilled people, advanced technical solutions and rich customer data. It also requires changes to how things are done in an organisation – you need the right culture and operational policies in place to truly put your customers first, even when they owe you money.
This research is a validation of our collections approach and emphasises that businesses need to treat customers fairly and as individuals. We hope we have made a valuable contribution to understanding people in debt and how to meet their needs fairly, and that organisations will implement some of the insights that we have uncovered to help create better outcomes.