A new report by the Credit Services Association (CSA) has revealed a significant disconnect between public perceptions of debt enforcement and the reality.
With concerns about discussing arrears with debt collectors often unfounded. Despite common fears, the likelihood of facing enforcement action is much lower than many believe.
The report “Tackling the Engagement Gap: Addressing the reluctance of consumers to discuss debt,” highlights that consumers often avoid engaging with creditors or debt collection agencies due to feelings of fear, shame, or denial. It delves into the psychological factors behind these emotions.
Daniel Spenceley the report's author and CSA Head of Policy, explained: “Many individuals behind on credit repayments hesitate to reach out due to misplaced fears, which are often fuelled by misinformation and a lack of understanding. To combat these misconceptions, it’s crucial to better educate both disengaged customers and the wider public so they feel empowered to address their financial situations."
Spenceley pointed out that a survey of frontline staff revealed that 60% of call center workers believe most customers are unaware of options for debt forbearance, how to get time to seek debt advice, or how to negotiate repayment terms that fit their personal circumstances.
The CSA’s polling showed that consumers believe 32% of debts handled by collections agencies result in court proceedings, yet data from CSA member firms shows the true figure is closer to just 7%, and those are primarily cases where customers repeatedly fail to engage. "When consumers realise the risk of court action is far lower than expected, our research suggests their fears decrease, making them more open to discussions about solutions and forbearance."
The report advocates for increased investment in financial education and enhanced regulatory measures to address public misconceptions, and therefore helping people to resolve their debt issues.
At Controlaccount, our focus towards debt collection is primarily pre-legal and our highly trained team have extensive experience and know exactly the course of action that will resolve your outstanding debt problems. We can provide solutions for a whole range of debt problems, and all aspects of our recovery services are conducted professionally, courteously and in accordance with Credit Services Association Code of Practice.
Source: www.csa-uk.com
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