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Protest debt on the rise in the UK

From the Knowledge Centre

Consumers in the UK are increasingly standing up to poor performing service providers by withholding payments that are due, according to Echo's latest research report...

Our recent survey of 1,500 UK households revealed that 48% of respondents had withheld or defaulted on payments in the past as a result of poor service or billing issues. Almost 1 in 3 people hadn't paid because the bill wasn't right or was higher than expected, 14% didn't pay because the bill was too difficult to understand or there was a mix up with it and 6% withheld payment because they felt they had received poor service.

This compared to just 28% of respondents who said that their late or non payment was as a result of not having the means to pay. Interestingly, our research also revealed that higher income households tend to be less tolerant of poor service. 1 in 10 of those earning more than £40,000 per year had withheld payment for this reason compared to just 1% of those earning less than £10,000 per annum.

The research findings highlight the importance of effective billing processes and high customer service standards in order to mitigate avoidable customer debt. Collecting outstanding payments is a clear priority for many organisations, and accurate billing and good customer service can help reduce late payments and the number of customers who fall into debt.

"There are many reasons why customers might not pay a bill, and despite lack of income being the most obvious, our research clearly indicates that debt cannot be attributed solely to financial circumstances. Today, consumers are more aware of their rights and have the freedom to exercise them - they may be less tolerant of poor customer service or innacurate billing or think that failing to pay won't always lead to debt collection procedures, for example."

Monica Mackintosh, customer services director, Echo Managed Services

The importance of understanding individual customers and their reasons for missing payments cannot be underestimated. A true understanding can mitigate debt before it becomes an issue or help resolve it as quickly as possible. Ensuring bills are clear and accurate, regular pre-bill customer engagement and early intervention strategies such as payment reminders are essential.

Internal and external data sources can be a strong indicator of customer behaviour and propensity to pay, but data alone cannot provide all the answers. It is best used to support personable and empathetic customer service to ensure that each customer receives a helpful and positive experience.

The research also confirmed that most customers feel guilty about missing payments (59%). However, a minority think that regular debt is acceptable (3%), that debt is acceptable if they have a more pressing need such as paying for a holiday (4%) and that late payment is not an issue and it causes no harm (6%).

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