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Call first, pay later: stimulating debtors to contact their creditors improves debt collection in the context of financial scarcity

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  • Dewies, Malte
  • Schop-Etman, Astrid
  • Merkelbach, Inge
  • Rohde, Kirsten I. M.
  • Denktaş, Semiha

Abstract

Debtors were stimulated to contact their creditors to negotiate a repayment plan. Contacting creditors was important because debtors were unlikely to repay the debt immediately and upon contacting, debtors could agree on a repayment plan to repay the debt in the long run. Using insights from scarcity theory and nudging techniques, a standard debt repayment letter was adapted and both letters were compared. Experimental results (N = 3,330) provide support for the use of nudging techniques as more debtors agreed on a repayment plan and response rates increased. The results underline the importance of stimulating debtors to contact their creditors.

Suggested Citation

  • Dewies, Malte & Schop-Etman, Astrid & Merkelbach, Inge & Rohde, Kirsten I. M. & Denktaş, Semiha, 2025. "Call first, pay later: stimulating debtors to contact their creditors improves debt collection in the context of financial scarcity," Behavioural Public Policy, Cambridge University Press, vol. 9(1), pages 88-105, January.
    • Handle: RePEc:cup:bpubpo:v:9:y:2025:i:1:p:88-105_6
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