Now you’d think this would be a no brainer! What could I possibly put here that you don’t already know? Surely everyone knows exactly what to do when things get a bit sticky and money becomes tight, yes?

No, amazingly many customers make things harder for themselves despite the fact that their creditors are primed ready and waiting try and  make things easier for them and so they miss out on many opportunities to be heard, helped and led to a solution that is right for their particular situation.

Why is this? Well it’s known that there are three main reactions to any formalised recovery action ….Embarrassment, Anger and Fear and any one of these will make an individual act in a way that they normally wouldn’t and if they are feeling all three then things can get pretty bad. StepChange surveyed their client base and found over 50% experience mood swings, sleep problems or performance problems at work. Enough to make anyone a tad grumpy. Customers can owe anything between £500 and £100k with the majority owing between £15k and £30k meaning they will likely have multiple creditors and be subject to many demands and enquiries causing stress.

So what is it that customers do that they shouldn’t?  In a nutshell they lie and I consider avoidance as lying too “sorry I’m driving” although I can answer the phone!  “Can you call back in an hour” so I can ignore the call. Yes it is through embarrassment anger or fear but they lie to the people who have the most invested in them and ultimately the most to lose …the creditor.

This is not helpful and makes ascertaining and understanding  the customers true circumstances regarding affordability extremely difficult because not only has the creditor got to reach them but when they do they then have to strip away the bluff and the  fabrications to get to the nub of things and  they have to do it in a way that doesn’t startle the horses!

It can foster bad feeling if the creditor cannot get the customer to be honest and share enough pertinent information to allow them to provide a solution. Frustration added into embarrassment fear and anger is not a great recipe for future relations. The customer can feel badgered and exposed and the creditor deceived and taken advantage of and as if this wasn’t bad enough it is made all the more difficult as it doesn’t seem that customers are fully aware of where their creditors are regarding the whole Treating Customer Fairly guidance.

So if you ask why the customer lies and this can be a simple as knowingly making promises he can’t keep, it’s generally because they were unaware that there is any form of help or forbearance available from the creditor, history and stereotyping have collectors labelled as heartless gangsters who will stop at nothing to get paid. When did you last watch a TV show or a film where someone owed money says “lets sit down and talk about this I’m sure we can find a solution we are both comfortable with”

Grant Thornton estimate that at the start of 2012 there were between 520,000 and 645,000 debt management plans ongoing, with between 300,000 and 375,000 of these provided by fee-charging debt management firms. They also estimated that there were between £12.8 billion and £15.2 billion debts outstanding being managed in debt management plans at the start of 2012.

Despite signposting to free advice, 30 day breathing holds, letters saying call us if you can’t afford this, income and expenditure schedules sent as a matter of course the customers seem genuinely unaware of what is now a more customer centric, understanding environment in which to be when you are experiencing financial difficulties.

So how do we tell them?

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