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Debt recovery and channel choice

Households across the UK are facing the financial squeeze. According to the Office for National Statistics (ONS), more than a fifth of adults in Great Britain (22%, equal to around 11.5 million people) reported borrowing more money or using more credit because of the increased cost of living between 25 January and 5 February 2023. This is an increase from 17% between 19 and 30 January 2022.

The economic climate is challenging, and debt is an unfortunate and inevitable consequence for many. Debt recovery is always a sensitive issue, particularly given the negative effect on wellbeing felt by those in arrears. The ONS also states that more than 4 in 10 adults who were borrowing more money or using more credit had high anxiety.

With little sign of the financial landscape changing any time soon, the collections sector faces a challenging period. In a recent article on the Credit Services Association (CSA) website, the Association’s CEO explained how the sector must “maintain the creditable progress made over recent years in engaging professionally with customers, upholding high standards and working with creditors to maintain credit availability by helping lenders recover sums owed. Public perceptions will continue to play a large part in the reputational standing of the collections sector – something that regulators and the Government will monitor closely.”

Collections is a necessary part of the process of maintaining ongoing credit facilities at affordable levels for as many people as possible. How the sector communicates plays a major role in how it is perceived by the public.

Communication options

The collections sector is not alone in trying to work out exactly how today’s various and numerous communication channels can be employed. The CSA’s 2022 report ‘Embracing technology: the growth of digital communications in the collections sector’ found that “firms expect to either explore or adopt new communications technologies in the coming years, which will afford customers a broader range of options to engage and discuss their debt”.

That’s the industry view. But what do consumers themselves think? Adare SEC recently surveyed 2000 UK consumers to establish their attitudes and expectations relating to business communications. The 19-page survey report – titled ‘Communication cut-through’ – reveals a picture of communication complexity. Consumers are embracing new digital channels with businesses but not at the expense of traditional channels. Both co-exist in an evolving communications landscape, with consumers demanding choice. Offering and managing this choice requires operational flexibility.

One survey question was specifically concerned with the collections sector and consumer engagement:

Which of the following channels do you think a customer would be most likely to engage with regarding collection of any outstanding debt?







Postal letter


Self-serve portal






Don't know


 Combination of responses ranked first, second and third

The results immediately highlight the communication challenge facing collections businesses. There is support for nearly every type of channel, suggesting the need for businesses to think strategically and build flexibility into communication processes if they are to remain in step with consumer attitudes.

Engagement channels

The strong showing for ‘face-to-face’ is no surprise. Arguably, this is the recognised and established image of debt collection – although it is very much the final action in a communication sequence. Recent headlines highlighting misconduct relating to collections in the energy sector have placed heightened pressure on firms to conduct face-to-face communications with professionalism and empathy.

Before face-to-face is a reality, the collections process typically goes through a number of stages. Here, the phone is recognised as an important engagement channel by consumers. In the dash to embrace digital, businesses may overlook the phone, but it remains a key tool in the collections portfolio. Voice has an infinite capacity for personalisation and tailored support. It is also more difficult to ignore. Businesses can build rapport and convey empathy in a way that simply isn’t possible across digital channels. The key is to ensure that communications are joined up, so that any calls reflect prior communications, and any subsequent customer contact reflects what is discussed on the phone.

Responses also show that Email and postal letters remain essential communication tools. Again, success here relies upon communications being coordinated and hitting at the right time. Email often works as a follow-up to a letter, confirming discussions and reinforcing actions. If such communications are sent too soon, recipients may feel harassed. If they are sent too late, then any engagement momentum will be lost. Consumer trust in the collections company and the process is also key, so it is also critical that message branding, design and tone remain consistent across all channels.

Digital channels such as self-serve portals and apps score less highly than ‘traditional’ communication channels, but appreciation for these tools is apparent. Our research amongst other industry sectors shows an increasing trend for consumer autonomy - a desire amongst consumers to fact-find and problem-solve themselves without reliance on third-party assistance. Implemented successfully, such tools enable this autonomy and can be hugely beneficial in driving swift resolutions, not to mention highly cost-efficient to operate.

Text messages are considered to be the least engaging channel. Obviously, texts leave little or no room for branding or design, and the channel can feel rather stark and obtrusive compared to others. Spam texts – and complaints about spam text – are also rising, leading to mistrust, particularly where sensitive matters such as finances are being discussed. The channel still has a role to play, however, and its immediacy and simplicity can be of benefit if recipient trust has been earned beforehand via other channels.

Communication complexity

Ultimately, collections firms find themselves at a tipping point. ‘Traditional’ channels such as post, email and the phone have served businesses well, but there is a growing consumer trend towards autonomy and self-resolution. Businesses in the sector are tasked with embracing this communications evolution in a way that meets regulatory requirements and improves collections efficiency.

It is not a case of new channels usurping old. Rather, as the consumer survey results emphasise, it is about having the operational ability to nimbly flex between communication channels as opposed to being locked-in to legacy processes. It’s about channels working together in synergy to expedite decisions and resolutions.

As the communications landscape becomes evermore complex, so collections businesses lean more on third-party communication experts to help them navigate through the shifting maze of options. Tweaks to existing postal and email processes can be just as powerful as suggestions for future digital improvements.

In short, there is no need to go it alone. The technological capability and expert advice is out there to ensure communication strategies are fine-tuned to deliver professional and empathetic service that drives results today and into the future.