Removing the stigma of debt

For most people who struggle with debt, it is a distressing situation. The internal shame they may feel isn’t helped by the social stigma. Talking to someone about their financial problems can make it easier to move forward. A more open discussion, in general, about financial issues could help ease the stigma of debt – and contribute to better financial well-being for more people.

In the late 1800s, it was still common to send people who couldn’t pay their debts straight to prison. Most countries, have moved past that stage. But even if prison is not looming, those who fall behind on their payments can feel a heavy burden, both from within and from the outside world.

Beatrice Widmark is a behavioural scientist at Whateverland who works with people to make them feel better about their economy and finances. She bases her work, among other things, on the psychological mechanisms behind financial health and distress.

Debt as a character marker

“There is research showing that people associate being in debt with having 
a poor character. The people in debt think so too, they convince themselves that they have caused the problems and that it is their personality that has been bad. In reality, there may be external reasons for the problems, such as divorce, unemployment, or generally challenging economic times,” she says.  

The media, including social media, like to highlight the debt cases that come from extreme cases of over­ consumption. This creates a picture of indebted people only being those who have bought expensive clothes or gadgets. It contributes to the general stigmatisation of all types of debt.  
“It can lead to people mocking those in a difficult situation because the cover­ age provides such an unbalanced picture of how involuntary indebtedness can arise,” says Beatrice Widmark. 

Personality matters

People of course react differently to financial problems. Some people are more neurotic than others. 
“Some may have fairly good finan­ces and only small debts but still stress so much about it that they can’t live a normal life. They are perhaps generally prone to worry and anxiety. It is distres­sing for them, but the positive aspect is that anxiety can serve as a signal that something needs to change. On the opposite end are those who don’t feel much, despite having large debts. Their reaction instead often involves repression, avoiding information that would be difficult to confront about their finances,” says Beatrice Widmark. 

Talking about the problems help

Those who struggle to pay their bills may feel too ashamed to talk to any­ one about it. According to Beatrice Widmark, however, research shows that those who have opened up and sought help feel much better. Even a little guidance from outside can spark hope of resolving their situation. 

For many, their first conversation with Intrum may also be the first time ever that they open up about their financial difficulties.

Social stigma is...

... the disapproval, or discrimination, of an individual or group based on perceived characteristics that serve to distinguish them from other members of a society. Social stigmas can for example be related to culture, gender, race, socioeconomic class, and health. Stigma can also be against oneself, stemming from negatively viewed personal attributes. (Source: Wikipedia)

Every day, Intrum’s call centre colleagues talk with customers who may have received a letter from Intrum and now have questions about it. For many, that call to Intrum becomes the very first time they open up about their financial problems. Perhaps their part­ner, family, or friends don’t even know what’s going on. 

Anel Mujkanovic, Head of People Development and Quality Performance Front Office at Intrum Group, and his colleagues have met many such “first­ time­callers”. 

Anel Mujkanovic, Head of People Development and Quality Performance Front Offic

“People are people, they react differently under pressure. Fundamentally, though, those who call need some­ one who sees them, hears them, and understands their situation. In order to suggest solutions, we need to put ourselves in their shoes and ask questions. We need to be empathetic, good listeners, try to understand, and always convey that we are there to help, not to judge. Our common goal is for them to become debt­free,” says Mujkanovic. 

Strong emotions often come into play

Intrum’s staff meet customers who are sad, afraid, or angry – or all at once. “It doesn’t matter though if the person is crying desperately or screaming aggres­sively, they all need a response that communicates that we will try to find a solution together, based on their unique situation,” says Mujkanovic. 

We get to see the entire emotional spectrum. Regardless, in one way or another, we can help our customers face the situation they are in. That is always a first step towards being able to work on a solution. For most people, it is a great relief
Anel Mujkanovic, Head of People Development and Quality Performance Front Office

He explains that Intrum receives a lot of feedback through phone calls, emails, and customer surveys from grateful customers who praise the Intrum team for its professional and empathetic attitude. Many describe contacting Intrum as an incredibly difficult step to take, because of the guilt and shame they felt. In hindsight, though, they wish they had made con­ tact earlier and spared themselves of so much worry. Some customers even say that Intrum saved their life. 
You are not a bad person just for being in a difficult situation. Above all, you are not alone; it happens to many people. It is important not to let shame take over but to dare to talk to some­ one,” says Anel Mujkanovic. 

Finding motivation is important

Even though very few people want to be in debt, they differ in how motivated they are in settling their debts. 
“Some people simply don’t feel like paying. They may have a lifestyle they want to maintain at all costs. For them, we have to explain, educate, and get them to understand what will happen if they don’t pay and how difficult their situation could become. There are of course other ways they ended up where they are and we must listen, so we fully understand and also build trust” says Anel.  

It was very nice to get a friendly reception in a difficult situation. No judgment, only help
Customer in debt in Sweden

“Only then can we fully stand side­by­side with the customer and help them find the motivation and a solution to help them become debt­free. It’s a very different starting point, than for those who welcome the help, and the com­plexity grows since these individuals may not seek help themselves. This is not a group that easily stretches out a hand and asks for help,” states Anel Mujkanovic. 

External pressures

Today’s society is full of signals about consumption and desirable lifestyles. Loans are easy to take. But over time, has it become more or less stigmatising to have debts? 
“That’s difficult to answer. For the individual, the feeling may not be different, but in general, there are now more people who are doing better, and social media shapes an image of how one should live with travel, housing, and consumption. This can make it more stigmatising to have to go into debt to live up to this,” believes Anel Mujkanovic. 
Beatrice Widmark calls for more open conversations about finance in schools and also in the public debate, to reduce the stigma around the topic.  
“It’s a fact that we talk very little about money, which in itself can contribute to the fear of being labelled as someone who doesn’t know how to handle their finances. If friends want to go out for dinner or plan trips that you cannot afford, it may be easier to come up with other excuses than just simply saying you don’t have the money,” she says.  
School doesn’t talk much about personal finance, and not everyone 
learns at home how to handle money. So, they enter life without knowledge or tools. 
“Some people may feel a bit ignorant about their finances and, therefore, choose not to talk about them at all. And if everyone is expected to live in a certain way and buy a lot of things, it feels like an even bigger failure to ‘end up on the other side.’ That’s how society is built,” means Beatrice Widmark