Engaging with People in Debt: A Guide to Effective Communication while Recovering Debts

By Isobel Crosse, Head of Strategy and CX

Debt collection is a sensitive and challenging process that requires effective communication skills to engage with individuals who are in debt. At TDX group we believe that it is crucial to approach these situations with empathy, understanding, and adherence to regulatory guidelines. This blog aims to provide valuable insights on communicating and engaging with people in collections and recoveries, with a particular focus on the Financial Conduct Authority's (FCA) Consumer Duty expectations.

When it comes to collections and recoveries, the FCA emphasizes four key consumer duty obligations:

Acting in the best interests of customers: Debt collectors should act honestly, fairly, and professionally, considering the debtor's best interests while recovering debts.

Communicating clearly, accurately, and transparently: Provide consumers with clear and accurate information regarding their accounts, repayment options, and potential consequences. Transparency promotes trust and informed decision-making.

Taking steps to avoid causing harm: We should take reasonable steps to avoid causing unnecessary distress, providing appropriate support and guidance throughout the process.

Encouraging customer engagement: Collectors should actively encourage consumers to engage with the recoveries process, offering assistance, information, and guidance to help them find suitable solutions.

For us, treating customers fairly and working within regulations is more than a promise.  By combining a range of ethical debt resolution services with consultative expertise, we find the best way to communicate with consumers and assist them in resolving their debt situation. We’re leading the way with profound environmental, social and governance principles. Delivering the results our clients need, while ensuring the welfare of consumers is at the heart of every decision we make.

Our top 5 tips for your communications: 

  1. Develop Empathy and Understanding: When communicating with individuals in debt, it is essential to approach them with empathy and understanding. Recognize that financial difficulties can be distressing and intimidating for them. By demonstrating compassion, you can establish a rapport and create a more receptive environment for communication.

  2. Use Clear and Respectful Language: To engage effectively with individuals in debt, use clear and simple language when explaining the debt, repayment terms, and options available to them. Avoid jargon and technical terms that might confuse or overwhelm them. Respectful and professional communication fosters a positive relationship and enhances the consumer’s understanding of their situation. We’ve worked with the Plain English Campaign to ensure that our communications meet their crystal mark standard.

  3. Educate and Inform: We should aim to educate and inform debtors about their rights, responsibilities, and available resources. Offer guidance on budgeting, debt management, and potential debt relief solutions. Sharing information empowers individuals and may help them find alternative ways to address their financial challenges. We’re committed to educating over one million consumers over the next three years – through our partnership with The Money and Pensions Service (MaPS), and our use of the Money Adviser Network.

  4. Flexibility and Negotiation: Recognize that debtors may have genuine difficulties in meeting their financial obligations. Be clear around flexibility. Tailoring solutions to their specific circumstances can increase the likelihood of successful debt recovery and minimize the negative impact on the debtor's financial well-being. 

  5. Continuous Improvement: Your communications should be continually improving and being adapted based on your consumer needs and the economic environment. We’re working with new AI technology provided by Amplified Global to ensure that our communications stay at the forefront of the industry.

Communicating and engaging with people in debt requires sensitivity, empathy, and effective communication skills. By adhering to the FCA's Consumer Duty and following the guidelines outlined in this blog, our industry can establish positive relationships, enhance trust, and work towards achieving mutually beneficial outcomes for both consumers and creditors. Remember, treating individuals in debt with respect and providing support can make a significant difference in their financial recovery journey.

If you’re interested in learning more about our communications strategy please contact us here