WATER SECTOR ONE OF THE LEAST LIKELY TO USE BEST PRACTICE DEBT COLLECTION TECHNIQUES, NEW RESEARCH REVEALS

Posted: Thursday 9th June 2016

Water companies are some of the least likely in the UK to implement best practice debt collection practices, according to new research by Echo Managed Services.

The report entitled "Counting the cost of debt recovery" quizzed 1,500 UK households on their debt collection experiences with eight everyday service provider sectors and how they felt the various industries fared up.

As part of the research, respondents were asked to rank the sectors which they felt deploy the best practice debt recovery processes - including friendly and helpful staff, easy payment options and affordable payment plans - with water companies coming third from bottom, scoring just 44/100 on a good practice index, perceived to be better than only telephone companies and local authorities.

The research also revealed that 63% of UK adults had experienced debt recovery procedures at one point or another, with one in three believing it is okay to fall into debt in extreme circumstances - when losing a job, for example.

Forgetful customers still pose the biggest challenge to businesses, with forgetting to pay being the top reason for why most people have made a payment late in the past (41%). A further one in four had struggled to pay a bill because their monthly incomings were less than their outgoings, while 16% had paid late because the bill was higher than expected.

Over half of customers (56%) cited that they'd be likely to switch to another provider if they received bad service during debt collection procedures, with an additional 41% saying they'd criticise the provider to others. The report concluded that given the high numbers of people now falling into debt, it should simply be seen as a natural component of the customer journey.

Commenting on the findings, Monica Mackintosh, customer services director at Echo Managed Services, said:

"Our research revealed a number of potentially concerning aspects in how debt is being collected across the UK, particularly in certain sectors. Hearing what consumers think in relation to different collection practices is insightful and businesses should be taking these findings on board. Whilst not perceived to be the worst industry when it comes to debt collection practice, consumers clearly felt that companies in the water sector had room for improvement when compared to those in other sectors such as retailers, banks and credit card companies.

"Understanding the wide range of reasons for debt and why people fall into it is crucial for organisations when honing their collection strategies. Ultimately, everyone has the potential to fall into arrears at some point - whether it's consciously or not - so treating these customers badly isn't fair, nor effective.

"Businesses should take a flexible approach to debt and adopt their collection strategies in line with the individual customer and their circumstances, as well as aiming to intervene early. Transparent and regular communication and payment reminders are essential here, and can lead to quicker and fairer outcomes - sometimes even reducing instances of accrued debt in the first place. If businesses don't consider the above they could be at risk of lost customers, reputational damage and customer disengagement. This will become of increasing importance to the water sector as we draw closer to non-household market opening in 2017, and the possibility of household competition as early as 2020.




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