LONDON — The aggressive tactics of debt collectors have left four in 10 of their targets fearing for their lives, according to recent research.
A poll of 1,000 British adults in problem debt reports that half don’t feel they have been treated in a humane way by the businesses they owe money to. Nearly a third (32 percent) have had a “rattling” experience with enforcement agents (known as “bailiffs” in the UK) even knocking on their doors.
More than half (52 percent) have had to take out further loans, landing themselves in more debt to keep collectors at bay. That’s led 46 percent left feeling anxious, and 12 per cent trapped by the situation.
The research, conducted by OnePoll, also finds that having such a negative experience as a customer has seen 21 percent make a formal complaint to the debt collection company and 18 percent stop using that business. More than one in 10 (12 percent) have left bad reviews online and 11 per cent post complaints on social media.
“With more people than ever falling into problem debt, sometimes for the first time in their lives, businesses cannot afford to ignore the abhorrent behavior employed by external debt collectors,” says Amon Ghaiumy, founder of ethical debt resolution technology company, Ophelos, which commissioned the research. “Not only does this worsen the impact of debt on consumers, but in the current cost of living crisis, this unethical approach is what will leave a lasting impression on millions of people.
“The fact is that people are going to blame businesses and lenders for the huge impact that bad debt collectors have on their mental and financial health. It begs the question of businesses: how do you want to be remembered when we come out of the recession?” he continues. “The actions they take in today’s crisis will be remembered – and that means they simply cannot let this behavior become the face of their business.”
1 in 5 people in debt have no savings to cover unforeseen expenses
The study also finds that quarter of those polled have spoken to friends and family about managing their debt and 50 percent have ended up borrowing money off friends in order to pay off loans. Another 41 percent have reverted to overdrafts, and 40 percent have turned to family to help.
But a year ago, 40 percent of respondents didn’t expect to be in problem debt like they are now – unable to pay household bills, taxes and energy bills. And 36 percent believe that if nothing changes, they will still be in the same situation, if not worse, by this time next year.
It also emerged credit cards, energy bills and rent are where most adults currently have outstanding debt. But 21 percent have no savings to cover costs for unforeseen expenses, while 18 percent say their salary doesn’t cover their outgoings. Although more than half (52 per cent) are hopeful they won’t go into further debt, they think energy bills (64 percent), water bills (60 percent) and food prices (47 percent) might make this difficult.
In all, the study finds the average Brit in debt has £5,492.50 (about $6,233) outstanding, typically owed to four companies.
“It’s becoming more common than ever to be in debt, and it’s not because people are ‘choosing not to pay their bills’ — it’s because they simply can’t,” says Ghaiumy. “It’s outrageous that one in five people are having to go into debt to afford basic necessities like groceries and medication. More needs to be done to help those in this financial crisis. Businesses need to better help support their customers through this hugely difficult time rather than letting their debt get worse or spiral out of control. Bombarding someone with threats won’t make the situation any better. With the right tools and an empathetic approach, resolving debt doesn’t have to be a scary situation if it is dealt with properly.
“And for individuals, it’s important to always seek support when in debt even if you are unable to pay it off and not suffer in silence – there is always advice or someone out there who can help,” he adds.
MAIN CAUSES OF PROBLEM DEBT AMONG THOSE POLLED:
1. Credit card
2. Energy bills
3. Rent
4. Overdraft
5. Mortgage
6. Council Tax
7. Buy now, pay later
8. Short term loan
9. Long term loan
10. Large item loans (i.e. furniture)
Report by Astrid Cooper, South West News Service
