A recent study has revealed that aggressive tactics employed by debt collectors have left 40 percent of their targets fearing for their safety. The poll, conducted among 1,000 adults facing problem debt, found that 50 percent of them felt they were not treated in a humane manner by the businesses they owed money to. Furthermore, 32 percent reported having had unsettling experiences with bailiffs knocking on their doors.
As a result of these distressing encounters, 52 percent of respondents resorted to taking out additional loans, thereby exacerbating their debt in order to keep collectors at bay. Unsurprisingly, this has caused 46 percent of individuals to experience anxiety, while 12 percent feel trapped in their predicament.
The research also highlighted the consequences of such negative customer experiences, with 21 percent of respondents lodging formal complaints against debt collection companies, and 18 percent ceasing to engage with those businesses altogether. Additionally, 12 percent expressed their grievances through negative online reviews, while 11 percent resorted to social media to voice their complaints.
Creating Positive Impressions Amon Ghaiumy, the founder of Ophelos, an ethical debt resolution technology company that commissioned the research, commented, “With an increasing number of people falling into problem debt, often for the first time in their lives, businesses cannot afford to ignore the abhorrent behavior exhibited by external debt collectors. Not only does this worsen the impact of debt on consumers, but in the current cost-of-living crisis, this unethical approach will leave a lasting impression on millions of people.”
Ghaiumy continued, “Businesses and lenders will be held responsible for the significant toll that aggressive debt collectors have on the mental and financial well-being of individuals. This raises the question: How do businesses want to be remembered once we emerge from the recession? The actions they take during this crisis will be remembered, and they cannot allow such behavior to define their businesses.”
Britons Struggling with Unresolved Debts The study further revealed that 25 percent of those surveyed sought advice from friends and family on managing their debt, while 50 percent ended up borrowing money from friends in order to repay their loans. Additionally, 41 percent resorted to using overdrafts, and 40 percent turned to family members for assistance.
Interestingly, a year ago, 40 percent of respondents did not anticipate finding themselves in problem debt as they currently are, struggling to pay household bills, council tax, and energy bills. Furthermore, 36 percent believe that, without any changes, they will still be in the same, if not worse, financial situation by this time next year.
Outstanding debt among adults primarily consists of credit card balances, energy bills, and rent. Alarmingly, 21 percent of individuals have no savings to cover unexpected expenses, and 18 percent find that their salaries do not cover their living costs. While 52 percent remain hopeful that they will not accumulate further debt, they identify energy bills (64 percent), water bills (60 percent), and food prices (47 percent) as potential challenges.
Dependence on Debt for Basic Necessities According to the research conducted by OnePoll, individuals in debt have an average outstanding balance of £5,492.50, typically owed to four different companies. Amon Ghaiumy emphasized, “Being in debt is becoming increasingly common, and it’s not because people are choosing not to pay their bills—it’s simply because they can’t afford to. It’s outrageous that one in five people are forced to go into debt in order to afford basic necessities like groceries and medication. More must be done to assist those facing this financial crisis. Businesses need to provide better support to their customers during these difficult times, rather than allowing their debt to worsen or spiral out of control.”
Ghaiumy concluded, “Bombarding individuals with threats will not improve the situation. With the right tools and an empathetic approach, debt resolution does not have to be a terrifying experience if handled properly. For individuals, it is important to seek support when in debt, even if repayment is currently unfeasible. They should not suffer in silence, as there is always advice and assistance available.”
Common Causes of Problem Debt Among Survey Respondents:
- Credit card debt
- Energy bills
- Council tax
- Buy now, pay later schemes
- Short-term loans
- Long-term loans
- Large item loans (e.g. furniture/white goods)
Six Steps for Those Struggling with Debt:
- Engage with your creditor: If you are having difficulty paying your bills, they may offer or direct you to further support.
- Communicate with your debt collector: Ignoring calls or letters may result in additional charges or legal action. Seek advice from organizations like Citizens Advice if you experience harassment.
- Consider installment payments: Negotiating a repayment plan with your creditor can make your debt more manageable.
- Inquire about breathing space: The government’s Debt Respite Scheme can provide protection from creditor action for up to 60 days.
- Explore grants: Various organizations have established support funds to assist individuals struggling with debt.
- Seek free advice: Charities such as StepChange, Citizens Advice, and the Debt Advice Foundation offer free and impartial debt advice.