Improving Debt Related Outcomes for Consumers

Richard Haymes explains how, through better use of data, companies can improve their debt recovery performance, reduce costs, and support their customers through debt solutions.

"We all experience the seemingly never-ending stream of reports, insight and opinion pieces on the state of UK PLC, and the impact that this will have on consumer spending, economic growth, and the ability of people to meet their credit commitments.

"The facts are clear:

  • Unsecured lending is currently at £213 billion, equating to £7,840 per household (this figure has grown £460 per household in the last year).
  • Credit card spending grew 8.1 per cent year-on-year in July 2018.
  • The National Audit Office reported in September that problem debt directly costs the public purse at least £248 million a year, with wider economic costs of £897 million.

"It’s also important to consider the nature of consumer debt. It’s not just consumer credit, but mortgage and rent arrears, arrears on essential bills (which, in 2017, impacted three million people), and outstanding payments to government, such as unpaid council tax and benefits overpayments (40 per cent of personal debts are to government).

"Personal insolvencies rose by 30 per cent in 2017, and are projected grow by a further 17 per cent in 2018

Companies should do their research

"Navigating the complexity of this societal challenge may seem daunting. However, if companies use the data about customers that’s available to them, and enhance it with new sources, such as bureau data and insolvency registers, they will be able to form a more rounded picture of their customers. They can see when customers are in financial stress and support them through intervention.

"If it’s established that customers have a problem making payments, then direct intervention is probably appropriate. However, if the data suggests that they have a broader issue and are struggling with multiple commitments, other treatments may be appropriate. These could include debt recoveries, financial difficulties treatments, or a warm hand-off to a third party debt advice resource.

The importance of sound, holistic debt advice

"During my time at StepChange Debt Charity, I saw first-hand the difference it made to people and their creditors when debt problems were managed holistically rather than in isolation. In so many situations, I witnessed families trying to do the right thing by juggling their income each month to spread it thinly enough to manage all of their different life commitments. When debts became unmanageable, other payments such as utility bills, credit payments or council tax payments were missed.

"In the short term, this tactic may work, but ultimately, without good debt or money advice, it is impossible to maintain all financial commitments in the long run.

Challenges for creditors

"The requirements on creditors of all types continue to grow. Greater complexity, more progressive regulation, enhanced regulatory requirements, and an increasing focus on the delivery of fair outcomes, value and net collections, mean that it’s a challenging time for the industry. But there are answers to these challenges.

"From my perspective, looking into the market, I would compel creditors to invest management time and focus on these key areas:

  • It’s an obligation that companies use the data they already hold on customers to gain greater insights and treat them appropriately – in doing so, companies improve net collections performance, while providing the appropriate support to customers in the process.
  • The debt advice sector is well supported by creditors, particularly in the financial services sector. But for organisations that don’t have an engaged senior level relationship, it should be a key focus. Having the ability to proactively refer customers to high-quality advice is of integral importance.

"Providing customers with a route to solutions specific to their individual requirements provides better consumer outcomes, improves net collections, enables companies to focus resources towards appropriate areas, including on those who are avoiding payment – and, ultimately, is the right thing to do".


  • The Money Charity, The Money Statistics, August 2018
  • UK Finance, Household Finance Update, July 2018
  • National Audit Office/StepChange Debt Charity, Tackling Problem Debt, September 2018
  • StepChange Debt Charity, Personal Debt Statistics Mid-Yearbook, 2017
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