As consumer debt rises in the UK, new research by InDebted lays bare dissatisfaction with the country’s broken debt collection model
This research evidences that a new solution to debt collection is required, as InDebted launches its intelligent digital platform into the UK to improve the consumer experience of debt and support financial wellbeing
Around 2 in 3 UK adults (64%) who have interacted with existing debt collectors in the UK say the experience was “stressful”, increasing to about 3 in 4 (74%) among 18-34 year olds
Nearly half (49%) have experienced harassment or aggression as a result of tactics frequently used in traditional debt collection
InDebted, the Australian-founded global fintech transforming the world of consumer debt recovery, reveals new research highlighting the impact of the UK’s existing broken debt collection model on consumers. This comes as InDebted officially launches into the UK following a successful period operating in Beta after being granted authorisation by UK financial regulatory body, the Financial Conduct Authority (FCA) in August 2021.
Consumer polling of over 2,000 UK adults, conducted by Opinium, reveals the extent of the negative experiences suffered by those who have fallen into debt. One in three UK adults (34%) who previously or currently have debts say they’ve been contacted by debt collectors. 64% of those who have interacted with debt collectors said the experience was “stressful”, a figure which rises to 74% among 18-34 year olds. Overall, 2 in 5 Brits stated their experience with collectors was negative. Staggeringly, half (49%) who have dealt with debt collection agencies encountered harassment or aggression, with 53% made to feel ashamed to be in debt.
Rather than supporting people to get on top of their debt, this treatment has exacerbated their financial position and led to poorer consumer outcomes. Over half (56%) of respondents who had previously worked with an existing UK debt collection agency said the experience had actually made it more difficult to resolve their debt.
Dissatisfaction with outdated debt collection tactics is increasingly concerning as UK consumers face growing financial pressures. 38% of Brits surveyed by InDebted are worried about increasing their debts or going into debt in 2022 amid cost-of-living struggles. This comes off the back of recent data from The Bank of England showing an acceleration in consumer spending on credit cards as inflation rises.
As well as reporting clear issues with treatment from debt collection agencies, part of the problem is how those in debt are communicated with. 52% of respondents who had currently or previously been in debt said they had been contacted by debt collectors using traditional non-digital methods, including sending letters (24%), making phone calls (20%), and bailiffs visiting their home (8%). In contrast, when asked, digital contact was the preferred option for over half (51%) of customers.
This research evidences that industry reform is vital, and a new solution to debt collection is required to better support UK consumers.
InDebted launches in the UK to reform a broken industry
InDebted’s latest move into the UK reflects the Australian fintech’s global growth ambitions, which has so far included successfully entering New Zealand (2019), Canada (2020), and the USA (2021). InDebted is transforming the global debt collection industry by supporting the overall financial wellbeing of consumers with an intelligent, digital-first and empathetic solution to debt collection.
Rather than relying on intrusive tactics such as phone calls and sending legal letters to contact customers, InDebted uses digital channels such as SMS and email. InDebted’s data science models learn and improve based on every customer interaction, informing how to connect with people through the channel they prefer, with the right message, at a time that’s convenient for them. Customers are then able to choose how they want to manage their debt via their self-serve digital portal, with a number of flexible, stress-free options. InDebted also has a global 24/7 support team available to assist customers across all channels.
In contrast to established industry players, InDebted rewards its customer support team based on the quality of service they provide, rather than incentivizing collections agents based on recovery amounts. This removes the inherent conflict of interest in the typical collection model, putting consumer outcomes at the heart of their proposition. To date, InDebted has over 1,800 5* star Google reviews from customers globally - unheard of in the industry, and the highest of any collections provider.
Josh Foreman, CEO and Founder of InDebted, commented: “At a time when the UK cost of living crisis will see an increase in debts, consumers in need of support are being failed by the broken debt collection model. This is leading to unnecessary stress, and poorer outcomes. Customers deserve to be treated with empathy, respect, and most importantly, enabled with convenience and autonomy to manage debt in a way that works for their individual financial position. The UK’s antiquated, traditional approach to debt collection has not adapted to changing tides of digitalisation, the global pandemic, and now, the biggest squeeze on consumer finances in generations."
“At InDebted, we are guided by a digital-first, data-driven solution that puts consumer outcomes at the heart of everything we do. Ultimately, we believe that those in debt deserve better from debt collectors, and InDebted is leading the way for change and progression within the industry. From our experience operating in countries such as Australia, the United States and Canada, we know what a difference we can make to consumers, and we are excited to launch in the UK to support people’s debt-free journey and financial wellbeing.”
This latest move into the UK market reflects demand for InDebted’s customer-centric approach to debt recovery and subsequent rapid growth, with the business increasing their headcount by 360% in 2021 alone and reaching 270 people in May 2022. This is underpinned by the onboarding of 93 new clients in 2021 across global markets, supporting over 1 million customers, and the completion of an AUD$25 million Series B in July 2021.
Notes to editors:
A survey carried out by Opinium between 19th to 22nd April 2022 amongst 2,000 UK adults, weighted to be nationally representative.
The Bank of England monthly Money and Credit statistical release for March 2022, 04/05/22 (https://www.bankofengland.co.uk/statistics/money-and-credit/2022/march-2022)
InDebted is changing the world of consumer debt recovery for good. We're a global digital debt collection solution with the world’s most intelligent, customer centric collections platform. Using data science and digital communication, InDebted has built a scalable product that delivers tailored messaging and personalised support to produce exceptional customer experiences and optimal recoveries. We are focused on the financial health and wellbeing of customers, taking an empathetic and understanding approach to supporting their debt free journey.
InDebted was founded in Australia in 2016 by our CEO/Founder, Josh Foreman. Fast forward to today, and InDebted has completed three funding rounds totalling $50 million AUD, we’ve grown to a team of over 270 people living and working in 11 countries around the world, and we’re operational in five markets (with many more to come soon).