Traditional debt collection is outdated – and it’s hurting your bottom line.
Outdated systems, confusing legal language and long wait times create dissatisfied customers.
Today, more consumers than ever interact with debt collection agencies. Yet many companies still treat this stage of the customer journey as an afterthought - outsourced, measured in costs and percentages, but rarely in customer experience. And that’s a costly mistake.
Because in this moment, when a customer has temporarily fallen behind lies one of the most underestimated opportunities to build loyalty, trust and long-term revenue.
This affects every company relying on traditional debt collection, slow response times, limited availability and language that intimidates instead of supports. It’s time to stop treating debt collection as just risk management and start seeing it for what it really is: customer service at its most critical moment.
We’ve made debt collection something to fear
When I started working in the debt collection industry nine years ago, it was in many ways a closed system. Ending up in debt collection was something to fear. Letters were bureaucratic, the tone formal and contact limited to office hours. Anyone who couldn’t call between 8 a.m. and 5 p.m. simply had to wait until the next day.
I know that traditional debt collection agencies have good intentions, but they often get stuck in systems built for another era. Development stalls, and many IT projects never become reality.
Today it’s even clearer: this no longer works. Society has changed, customer expectations and needs have changed, but the debt collection industry has remained stagnant.
Wrong incentives have slowed down the development
I have personally been in negotiations where the focus was more on how long a case could stay open rather than on how quickly it could be resolved. Debt collection was seen as a technical process, not a human relationship.
In the past, debt collection was often about “cleaning up,” closing a debt, marking it complete, drawing a line. But for every debt that was settled in this way, the company also lost a customer. It was as if they didn't understand that the relationship could be saved. That behind every reminder and demand letter there was a person who perhaps wanted to and could pay, but needed help to understand, find the right information or just get a little more time.
Unfortunately, debt collection is still often seen as a technical and legal process rather than a natural and important part of the customer journey. My belief is that debt collection is not primarily about closing a debt case. Instead, it is about restoring trust or strengthening a customer relationship.
Today, the debt collection industry is on the same transformative path banks started 20 years ago.
The banking sector changed when customers grew tired of limited opening hours and paper forms. They went from ‘personal bankers from 9am to 5pm’ to increased availability, 24-hour self-service and simpler advice. Today, the debt collection industry is undergoing the same shift.
Most people who end up in debt collection do so not out of ill will, but because something has gone wrong somewhere in the process. A return has been missed. An invoice got lost. A payment has been forgotten. Is being met with legal jargon, long queues and an authoritative tone really the best way to resolve the issue?
At coeo, people and technology work seamlessly together: empathetic advisors paired with an AI chatbot that’s available 24/7 in over 50 languages, with no waiting at all.
It’s 2025. Why do customers have to call to get help?
The debt collection industry needs to take responsibility and lead the way
I believe the companies that will succeed in the future are those that see credit and debt collection as part of the customer journey, not just an administrative closure. For companies, it’s about protecting their brand and profitability. For individuals, it’s about being able to pay easily or get good advice. For society, it’s about tackling over-indebtedness and building financial security.
Helping customers builds loyalty
It may sound like a paradox, but it's often when something goes wrong that the relationship is defined. A customer in debt who feels, “They listened, they understood, they made it easy,” becomes a loyal advocate, returning to shop again and recommending the company to others.
When companies handle cases quickly, transparently, and with empathy, they gain higher loyalty, lower costs, and faster resolutions.
A fairly simple business logic.
About the author:
Pernilla Almström
CEO coeo Sweden & Finland
pernilla.almstrom@coeo-inkasso.se
Presskontakt:
Malin Gustafsson
Marketing Manager
+46 722 36 48 76
malin.gustafsson@coeo-inkasso.se