We spoke to Mark to learn more about the service that StepChange provide and to hear his thoughts on how utilities and financial services companies can better serve people in vulnerable circumstances.
How does StepChange provide support to people in vulnerable circumstances?
People generally come to StepChange through two points of contact; we have a telephone advice service and an online debt advice service – Debt Remedy.
Just over 60% of the people we help come through the partnerships we have with credit providers and services providers. So your high street banks, lenders, retailers, all the way through to utilities companies and smaller non-creditors. Other charities will also refer people to our services.
We then work with people to understand their outgoings, what their disposable income is, and will recommend the debt solution that is most appropriate to the individual. We support them through the entire process.
Is the demand for your service changing?
StepChange has been in existence for just over 25 years, and year-on-year demand for our service grows. We helped 620,000 people last year, up from 599,000 in 2016.
One thing that was particularly interesting last year was that our online debt advice service overtook our telephone service as the channel of choice to access debt advice.
We’ve had an online debt advice service for over seven years and usage had been creeping up slowly, until last year when it was 60:40 to our online service. So we are seeing a change in people’s behaviour - in terms of how they're choosing to engage with us.
Why do you think people are switching to digital?
Confidentiality is certainly a factor – it was one of the reasons why we launched our digital service. The way it’s set up, you don’t need to enter any personal details until you get to the very end – and we only require personal details if the person wants to activate the debt solution.
The main reason though is technology – it’s more accessible now. We had almost 4 million website visits last year, which is about a 20% increase on the year before.
The majority of people who used Debt Remedy last year did so through mobile. People use our service on the go.
They can engage with us on their commute to work, without anyone knowing what they’re doing, for maybe five or so minutes, then save their reference and finish it off when they get home. For many, that’s easier than having to find a quiet corner in the office, and commit their lunch break to go through the whole process over the phone.
We also know that a lot of our 4 million visitors to the StepChange website are repeat visitors.
People will come to our site, browse some information, and they might do that multiple times before they go through our digital Debt Remedy service. Generally, they'll take a couple of goes to get through that too.
Are more people struggling with debt?
Yes. The Money Advice Service reported that 8.3 million, or 15.9% of people in the UK, are living with a debt problem – up from 15.4% in 2016.
One thing I would say though is that the total levels of debt per client that we’re seeing as a charity are smaller – though this is reflective of a change in client profile, and a shift towards clients who are younger and have a lower income than those of a few years ago. More of our clients now are tenants, and fewer are home-owners.
I've been with the charity just short of 6 years now, and when I started, levels of debt were just over £21,000 on average. That's fallen to around £16,000.
However, the issues are becoming more complex, in that debt is being spread across a number of different sectors. Now it’s not just a core issue with banks and big financial services lenders, but also more subprime lenders, payday loans – and we’re seeing higher levels of arrears within utilities.
Are people generally aware of the support available to them when they fall into difficulties?
Awareness of support isn't huge – it’s why 60% of the people we help have been referred to StepChange directly by creditors.
And I know that from speaking to the collections organisations that I deal with that engagement with the customer is difficult, even when they're in a position to offer help.
Particularly utilities companies, who will have social tariffs, energy efficiency offerings - some will even look to write debt off or make bill reductions. Even where companies are able to offer real support, they’re just not able to connect with the customer.
It’s because of the stigma related to debt and the emotional impact that has on people. They might be fearful of what's going to happen, thinking that if they tell their energy supplier they can’t afford to pay their bill, then they’ll get cut off. But actually, there’s a lot of regulation there to protect the consumer - knowledge of it is just relatively low.
What one change would you like to see utilities and financial services companies make to better serve people?
StepChange is looking forward to the introduction of a statutory breathing space scheme, and it needs to be consistent across all sectors to work.
Some organisations apply a 30 day breathing space because of their regulator – like within financial services. Utilities companies will give it on a voluntary basis. Local and central government departments collecting tax debts, arrears and other government debt generally won’t apply a breathing space at all.
StepChange is campaigning to have consistency. So when someone comes to us for help, we can say, that by addressing your debt, through focusing on your particular problems, all of your creditors will give you a breathing space. That might be 30 days, it might be 6 months, depending on the situation, but we would like some consistency across all sectors.
What one change would you like to see utilities and financial services companies make from a digital perspective?
One of the things that I've been trying to address with the utilities companies that I work with, is that everything is geared around picking up the phone.
But if you look at their customer acquisition; they’ll have an online platform for people to sign-up on, arrangements with multiple switching websites, then once you’re a customer, there’s usually an app for you to manage your account from.
All of that exists from a marketing perspective, yet if you miss a payment, you drop straight into their telephone service. And that's usually the beginning, middle and end of collections - it's all telephone activity.
Debt advice is a difficult proposition and you almost need to have a marketing view on how to engage with customers. Very few organisations will take that approach, and that's why the channels to contact are so narrow.
Some organisations are starting things like email, webchat, or WhatsApp, but in most places that I know of, it's in its infancy or it's in a pilot phase.
It means that customers who've chosen not to speak to anybody, so have signed up with an organisation online, are then forced out of that comfort zone. And we're talking about something that's already an uncomfortable topic.
It’s even more problematic for people dealing with multiple vulnerabilities. If someone has a hearing or speech impairment, they’re really going to struggle over the phone. They’ll probably be forced to write a letter, and the response they’ll get will likely encourage them to get in touch via phone anyway.
That means they then need to tell someone about their debt, to bring in an advocate over the phone. Whereas a service like webchat would allow them to overcome their vulnerabilities.
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