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UK consumers are increasingly standing up to poor performing service providers by purposely withholding payments, according to new research - with 48% saying they had withheld or defaulted on payments in the past as a result of poor customer service or billing issues.

The survey of 1,500 households, by Echo Managed Services, revealed a number of reasons for debt outside of consumers simply not having the financial means to pay. Almost 1 in 3 people hadn’t paid because the bill was incorrect or higher than expected; 14% because the bill was difficult to understand or there was a mix-up with it; and 6% because they’d received poor service. Just 28% of people said that late or non-payment was as a result of not having the means to pay.

The research also revealed that higher income households are less tolerant of poor service, with 1 in 10 of those earning more than £40,000 per annum having withheld payment for this reason in the past, compared to just 1% of those earning less than £10,000.

Understanding the importance of collecting outstanding payments Echo are now urging service providers to improve their billing processes and customer service standards, in order to mitigate some of the reasons behind avoidable debt and to avoid losing valuable customers in a market full of competition and choice.

 

 “There are many reasons why people might not pay a bill and although a lack of income would be the obvious reason, our research clearly indicates that these days debt cannot be attributed solely to financial circumstances. Consumers are now much more aware of their rights and have the freedom to exercise them. They might be less tolerant of poor customer service or inaccurate billing, or think that failing to pay won’t necessarily lead to debt collection procedures, for example,” said Monica Mackintosh, customer services director at Echo Managed Services.

“That’s why it’s so important to understand customers and their reasons for missing payments so that the debt can be mitigated before it becomes an issue, or be resolved as quickly as possible. Making sure bills are clear and accurate, regular pre-bill customer engagement, and early intervention such as payment reminders are essential.  In addition, a range of internal and external data sources can provide a strong indicator of customer behaviour and propensity to pay. But data alone does not provide the answer and should be used to support personable and empathetic customer service to ensure customers receive a positive experience” she added.

The report also revealed that although most customers do feel guilty about missed payments (59%), a surprising 3% think that regular debt is acceptable and 4% think it’s acceptable if they have more pressing needs, such as paying for an annual holiday. Over 1 in 4 think it’s acceptable to get into debt in extreme circumstances, while 6% think it isn’t an issue to be late with payments and that it causes no harm.

 

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Echo Managed Services, the specialist provider of outsourced end-to-end customer contact services, has strengthened its collections division with the acquisition of Sheffield-based Grosvenor Services Group. Grosvenor is one of the UK’s leading debt collection agencies, specialising in field-based collections within the utilities sector.

Combining Grosvenor’s field based skills with Echo’s comprehensive multi-site contact centre resource and office based collections expertise will further strengthen Echo’s end-to-end customer contact proposition, with the company offering comprehensive customer journey support, from initial sign-up through to ongoing debt recovery where necessary. The acquisition of Grosvenor Services Group follows Echo’s 2011 purchase of London based Inter-Credit International – one of the UK’s longest established debt recovery agencies with over 40 years’ experience and speciality in office based collections.

“Acquiring Grosvenor Services Group is a great strategic move for Echo as we have complementary skills and expertise, particularly in key sectors such as utilities and the public sector that are central to Echo’s expansion plans,” commented Steve Wrench, Operations Director at Echo. “Echo already bills and collects many millions of pounds for utility and public sector clients each year, and the addition of Grosvenor’s proven debt recovery and debtor tracing solutions – backed by its strong field-based collections resource – will further strengthen our operation.”

 

Echo’s Managing Director, Nigel Baker added: “We have an on-going commitment to provide our clients with a best practice approach to collections - one that not only delivers better results for our clients but also ensures full compliance with key industry regulatory and governance requirements. With the specialist skills and expertise that the Grosvenor team brings, we look forward to further strengthening Echo’s collections capability.”

Echo’s leading edge collections strategy is based on a powerful data-driven approach that focuses on helping organisations to choose the right solution for the right customer at the right time. Echo is focused on ensuring that it consistently delivers on collections targets for its clients, while always treating their customers fairly with empathy and understanding. Following the acquisition, Grosvenor’s Sheffield-based operation becomes Echo’s seventh site.

 

Commenting on the acquisition, Lloyd Birkhead, MD of Grosvenor Services Group Ltd said: “at Grosvenor we’ve built a reputation over the last 17 years for providing our customers, particularly those in the utilities sector, with a high quality debt recovery service. I’m therefore delighted that in Echo Managed Services we move forward with a complementary business partner that will build on our success by integrating Grosvenor and our services into its end-to-end customer contact proposition.”

Assistance for the acquisition was provided by FDYL LLP and Ironmonger Curtis LLP.

 

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