When we think about people being in debt, it’s easy to assume it’s because they cannot afford to pay their bills. It turns out that’s often not the case.

According to a new survey, not having the means to pay is the cause of late or non-payment for only 28% of people who’ve got into debt.

 Almost half (48%) of the 1,500 people surveyed by Echo Managed Services said they have withheld or defaulted on payments after encountering poor customer service or billing issues.

There are many reasons why people might not pay a bill

Monica Mackintosh, customer services director, Echo Managed Services
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Around a third of respondents hadn’t paid a bill because it was incorrect or higher than expected and 14% because the bill was difficult to understand. 6% said they’d withheld payment due to poor service.

Echo’s research suggested that higher income households are less tolerant of poor service. 10% of those earning more than £40,000 per annum have withheld payment for this reason, compared to just 1% of those earning less than £10,000.

59% of customers feel guilty about getting into debt. Image by Dean Drobot/Shutterstock.com

Monica Mackintosh, Echo’s customer services director, said: “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.

“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.”

She said firms should make sure bills are clear and accurate, and should engage with customers in ways such as issuing payment reminders. 

The report revealed that although 59% of customers feel guilty about missed payments, 3% think regular debt is acceptable. 

A further 4% think debt is acceptable if they have more pressing needs, such as paying for an annual holiday. 

More than one in four 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.