The Mental Health Impacts of Customer Debt – A New Approach That Satisfies Customers and Business

The ramifications of debt stretch far beyond financial constraints.

The impact of debt isn't just about dwindling bank accounts but is profoundly psychological and cognitive.

This not only affects decision-making but also carves a significant dent in an individual's mental bandwidth and can shorten patience levels of individuals making them more prone to outbursts.

Anyone who has ever experienced a short or long term squeeze on their finances knows that the emotional toll of being behind on bills and the anti-family, anti-community behaviours that can appear as a result.

But as we delve deeper into these intricacies, we find that solutions may lie where we least expect them: businesses.

One of the most effective strategies to address community debt is for businesses to play a proactive role.

Often legislative and regulatory obligations focus on the 'clean up' but instead of merely focusing on the repercussions, businesses can prioritise solutions that prevent their customers from falling into debt in the first place. The logic is straightforward: by helping consumers maintain financial stability, businesses can nurture long-term customer relationships, bolster their brand reputation, and foster community goodwill.

Today's business processes, and a considerable chunk of regulations and legislations, are centered on treating customers who are already in dire straits or are grappling with debt in a humane manner.

And let's not ignore that the current swathe of policies, regulation and legislation already takes significant effort for businesses to implement and maintain the compliant running of.

While the existing suite of regulations and legislation is undoubtedly aimed to be beneficial, much of current policy is a reactive view to debt and doesn't adequately address the options available to business and customers to not need debt repayment plans in the first place.

To use an analogy, much of what current-day policies focus on is it's akin to investing more in ambulances and medic training while sidelining crucial preventative actions such as ensuring seatbelts are mandated, instituting reduced road speeds, and emphasizing the importance of airbags. Prevention, in most cases, is more impactful than cure.

Consider the potential implications of businesses emphasizing prevention. By introducing financial literacy initiatives, new and flexible payment structures, simply making bills easily shareable to friends and relatives or even debt education as part of their customer relationship programs, businesses can drastically reduce the chances of their customers falling into the debt trap. Such a forward-thinking approach not only mitigates the mental toll of debt, magnified by mental accounting intricacies, but it can also serve as a differentiator in a crowded marketplace.

This study from the National University of Singapore underlines the cognitive strain of debt, especially with multiple bills creating a heavy mental load.

Now, imagine businesses adopting a preventive approach—consolidating bills, offering financial advice, or even providing timely monetary educational resources. The impact on community mental health and overall well-being would be monumental.

To truly revolutionize our fight against poverty and the debilitating effects of debt, it's time for businesses to be at the forefront.

The call to action is for both policymakers and the business community: understand not just the economic but the cognitive burdens borne by the less fortunate. By doing so, we pave the way for more effective, sustainable, and compassionate solutions.

This isn't just corporate social responsibility—it's about shaping a more equitable future.

About HelpPay

Helppay is a 100% Australian owned and operated company that partners with service organisations in complex and highly regulated industries to improve cash flow, reduce customer debt and enhance companies social standing by removing debt from the communities they serve..

HelpPay's B2C app makes getting and giving help easy and trusted and Helppay's B2B platform and API enables businesses to offer a debt prevention service and track performance in conjunction with existing customer soltutions and billing programs.

Download our Alinta Energy case study, here.