Digital debt collection agency InDebted arrives in the UK aiming to improve sector image

At a time where cost-of-living is soaring, inflation and interest rates are rising and recessions, both globally and locally are on the horizon, consumers are more vulnerable than ever.

Millions of people are overdue on debt and now, after a slight detour through Canada and the US thanks to covid, InDebted has made its way to the UK at an acute time.

After gaining Financial Conduct Authority authorisation last August and a period of beta testing, the digital debt collection agency is on a mission to reform the industry, with a focus on “financial fitness” rather than simply collecting money.

“The three pillars the company were built on were digital communications, data science and customer experience,” InDebted CEO Josh Foreman told AltFi.

“The reason why that was the case is that if you contrast that with a traditional debt collection market, it is fundamentally a call centre driven business, either onshore or offshore, with very little use of technology or sophistication with data, and absolutely no appreciation for helping consumers or remotely providing a good customer experience.

“It's about how much money can you collect from people as fast as possible, as cheap as possible,” he added.

Focused solely on consumer debt, InDebted has in fact practically removed the “call centre” side of debt collection, with 92 per cent of customers never engaging or speaking to employees directly, instead choosing to talk over email, text WhatsApp etc.

The company figures out how individual customers like to be contacted and at what days and times – whether that’s formal communication with someone over the phone, or even emoji, according to Foreman.

“We will message people on the preferred channel with the right template at the right time to get far better engagement than you would with a traditional debt collector,” he said.

“Not only do we collect more money, we're way more compliant because we do it through software and we help consumers way more, because we support them through that journey.

“We help them improve their financial fitness, and we provide them a far easier integration platform to actually have a very difficult conversation [...] which is not something a lot of people really want to have with someone ever find on an unscheduled phone call at some hour in the day that is not convenient for them.”

The state of UK consumer debt 

The move to the UK was driven by clients, Foreman said, where there’s a huge fintech market that “desperately needs [their] product”.

With a sole focus on unsecured consumer debt, 85 per cent of the company’s revenue and customer base comes from financial services, and it is one of the largest collectors of ‘buy now, pay later’ debt.

Given the business model of ‘buy now, pay later’, with companies relying on customers returning to them over and over again, it makes sense that they would value a company that provides a positive experience in debt collection that won't put users off.

According to Opinium research on behalf of InDebted of more than 2,000 UK adults, nearly half of those surveyed said they had experienced harassment or aggression as a result of tactics used in traditional debt collection.

In addition, over half (56 per cent) that had previously worked with a debt collection agency said this made it harder to resolve the debt.

InDebted, voted the best place to work in Australia, somehow has almost 1900 five star reviews on Google.

This is likely driven by the fact that employees are not compensated for how much money they collect, but instead for how many positive reviews they get.

With the long term goal of becoming a company that overall improves customers’ financial fitness and not just collecting their debt, there is clearly a focus on ensuring a positive experience, whether that means “snoozing” your debt for a period of time, or setting up payment plans with vulnerable customers.

As 38 per cent of Brits surveyed are worried about their debts increasing or going into debt this year because of the cost of living crisis, hopefully InDebted is as shiny as it appears to be.