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Abstract

This study researches debtors’ perception of debt collection agencies. The research data shows that a debtor perceives the debt collection as expensive, greedy and uncompromising as well as even sometimes extortionate and threatening. Yet positive perceptions appeared such as flexible, well mannered and polite. The debtor’s attitude towards debt collection agencies defines a significant part of the working environment of a debt collection agent – this study provides valuable information to inform the conduct of debt collection agents.
EJBO Electronic Journal of Business Ethics and Organization Studies Vol. 23, No. 1 (2018)
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Debtors' Ethical Perceptions of the Debt
Collection Process
once. Or we could imagine a furniture
seller who tells a customer not to worry
about the price – you need not pay any-
thing for six months. Everything is about
distracting the buyer from the price, and
making the goods look like they will cost
next to nothing. When it is time to pay –
maybe through a debt collection agency’s
actions – it is no surprise that the buyer
perceives the debt collector as greedy and
the demands expensive or even extor-
tionate.
As offers of short-term loans are con-
stantly increasing, all kinds of automated
systems to monitor the consumer’s pay-
ment behaviour have developed, and of-
ten a consumer cannot fully understand
how his or her financial capabilities are
evaluated. Therefore it can be quite sur-
prising and sudden when a consumer no
longer qualifies for a long-term payment
method or monthly payment programme
from a seller or a loan. Soon a debt collec-
tion agency contacts the consumer and
its demands are easily perceived as extor-
tionary and uncompromising.
Yet there are multiple stories of how
one can easily fall into a situation where
a debt collection agency starts to make
demands. Ultimately, a debt collection
agent tells the debtor it is time to start
paying back. We assume that the debtor
will not generally perceive a debt collec-
tion agent or agency positively – but how
do they describe their feelings and what
words do they use to define debt collec-
tors?
We shall use an ordinary language
philosophy as a loose theoretical basis for
analysing the words and phrases debtors
use to describe debt collection agencies.
This study provides basic analytical data
about the attitudes of debtors toward
debt collection agencies, which can be
used in further studies and in practice in
industry. In addition, we see this study
as providing important basic knowledge
for understanding the sociological envi-
ronment of the debtor as more and more
people fall into debt.
It is difficult to reason this study on
the basis of a theoretical perspective,
but the current social context clearly in-
dicates that the study is relevant. Quick
loans and borrowing money in general
has become quite easy for consumers and
Jarkko Jalonen
Tuomo Takala
Abstract
This study researches debtors’
perception of debt collection
agencies. The research data
shows that a debtor perceives
the debt collection as expensive,
greedy and uncompromising
as well as even sometimes
extortionate and threatening. Yet
positive perceptions appeared
such as flexible, well mannered
and polite. The debtor’s attitude
towards debt collection agencies
defines a significant part of the
working environment of a debt
collection agent – this study
provides valuable information
to inform the conduct of debt
collection agents.
Key Words: debt collection,
business ethics, management,
financing, language philosophy
Introduction
In society there are numerous different
contractual obligations between indi-
viduals and business entities – these re-
lations are sometimes not fulfilled as ex-
pected, which often means there exists
a demand for money from the obligor.
The operational environment of a debt
collection agency is conciliating these
monetary breaches of contract or regula-
tion. On the one hand, there is a creditor
expecting full compensation, and on an-
other, a debtor incapable or not willing
to fulfil his or her obligation. This study
researches debt collection agencies from
the point of view of the debtor – how do
they perceive debt collection agencies?
The debtor is the one who has an un-
paid liability to a creditor. The creditor
is therefore a party who expects payment
from some debtors – often the creditor
is a business entity but not always. The
creditor could also be a private individ-
ual, who is renting an apartment and the
tenant is not paying the rent as agreed.
The debtor can be a private individual or
a business entity depending on the na-
ture of the receivable.
The creditor can assign a debt collec-
tion agency to carry out the debt collec-
tion activities. A debt collection agency
is a firm that possesses the licensed right
to run debt collection activities. A debt
collection agency’s main function is to
motivate the debtor to pay.
A debtor’s perception of a debt collec-
tion agency can affect the debt collection
organization and its members – the debt
collection agents. This study explores
the general attitudes of debtors towards
debt collection agencies with the aim
of aiding in understanding the working
environment of a debt collection agent.
The study’s main target is to explain how
debtors perceive debt collection agencies.
Generally, we can say that quick loans
and short-term loans or obligations have
increased drastically in recent years. A
consumer can postpone the payment of
even the smallest purchases in almost any
shop. Furthermore, sellers use monthly
payments to make expensive goods look
more attractive – for instance, buying
a car for just a few hundred euros per
month instead of tens of thousands at
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it is a daily practice in our lives as almost everybody has at least
one credit card in their pocket. Therefore, it is relevant to ex-
plore who falls into debt and how they perceive that situation.
This study is based on empirical data where the direct con-
nection to a theoretical framework is more introductory or
explaining the theoretical context of where the study belongs.
We attempted to gather existing studies that look at debtor’s
perceptions but unfortunately, we could not find any such stud-
ies. Therefore, this empirical study could be seen as the basis
for further studies of the perceptions of debtors. The paper
concludes by comparing the findings according to a theoretical
framework, and identifying the need for the research.
Theoretical background
Ethics is often at least partly defined as acting to prevent sub-
stantial harm to others (Robin, 2009), which is then closely
connected to the terms good and bad, right and wrong, duty
and obligation (Morris, 2004). We base this study on Ludwig
Wittgenstein’s statement: “If you want know the meaning of
a certain word or term, look upon its use in social life”. This
research is therefore connected to the philosophical concep-
tion, which can be referred to as “an ordinary language philoso-
phy”, and which especially flourished in Oxford in the 1950s
and 1960s (see Wittgenstein, 1981). As von Wright (2001) de-
scribes different varieties of goodness, we also consider another
aspect of goodness that Wright describes in his book. Wright
recognizes instrumental goodness and its counterpart – a bad
or poor instrument.
Instrumental goodness appears, for instance, as money which
is instrument to achieve a good life. According to Levinas (2007),
money itself is nothing more than human labour transferred
into measurable units – whether tangible goods or services are
purchased using money, behind this there is ultimately always
a certain amount of human labour. Levinas (2007) approaches
money in terms of interestedness and disinterestedness.
Interestedness refers to ‘Freedom, the independence of the
rich!’ or others in terms of hours, days or years through money
in their bank account. Disinterestedness refers to a willingness
to give money away to those in poverty, which can be seen when
money is not there as it has been given to strangers. Interested-
ness and disinterestedness could be seen as thesis and antithesis
– Levinas (2007) concludes therefore that there must be justice;
a society to control these kinds of egoistic or even altruist phe-
nomena – bringing a balance – like a synthesis.
In debt collection, a debtor’s monetary payment is missing or
not satisfying the asked price. A service or a product has been
handed over under the understanding that whoever will benefit
from it will pay for it. Debt collection then, means handling that
via trust. Therefore, we also consider the debt collection service
itself as an instrument, which targets as a result of a better life
a return to monetary balance between the creditor and debtor
– although trust might remain out of balance. Is debt collection
good or not good? From an instrumental point of view this is
another way of asking whether the debt collection is successful
or not? From the debtor’s point of view, an instrumentally good
debt collection service could mean the debt collection which re-
sults in as little harm as possible toward the debtor on conduct-
ing the debt collection.
As in a previous study (Jalonen & Takala, 2016) of the
profession of debt collection agents from the ethical point of
view, we see that an employee of a debt collection agency is sur-
rounded by ethical dilemmas, where on one hand, the creditor
is expecting money as quickly as possible from the debtor, and
on the other hand, the debtor might fall into debt without any
intention of paying anything at all. There are also situations
where the legislation is guiding our conduct in one direction,
and the employee’s own moral code (conscience) is in conflict
with those regulations.
Every business can be considered a mixed bag of virtues and
vices (Hülsmann, 2008) as it is not only about virtues but also
vices, for example when some businesses encourage things like
greediness or coldheartiness. The virtuous debt collection agent
(Jalonen & Takala, 2016) is considered to be selfdisciplined,
assertive, judicially prudent, obedient of the regulations and
truthful.
Research method and data
The research data was gathered using a questionnaire sent to
randomly selected debtors from the Suomen Perintätoimisto
Oy’s customer database. In this database there were in total
72,738 debtors. From this, roughly half were business entities
and half private individuals. If the debtor was business entity,
the questions were targeted at the people who take care of pay-
ments in, and therefore the answers were always the opinion of
a certain individual person. These debtors had many kinds of
unpaid liabilities – such as service fees, rent, small loans, goods
and others. Our aim was to ensure a healthy variety of different
kinds of debt collection cases.
In total we gathered 157 answers from which 118 were full
answers and qualified together as a representative sample of the
debtors’ perceptions of debt collection agencies. The respond-
ent’s ages ranged from 24 to 71 years.
In the questionnaire, the debtors were asked to freely list
three adjectives with which they would describe a debt collec-
tion agency, and to write about positive and negative experienc-
es they have had with debt collection agencies. The data there-
fore contains lists of adjectives and texts describing experiences.
The raw data was then analysed and classified using a narrow
content analysis method. Every respondent’s adjectives were
classified by defining a corresponding English language adjec-
tive to best describe the Finnish language adjective or, as many
of the respondents did not give an exact adjective or wrote short
phrases instead of a single adjective, we sought adjectives that
best matched the respondent’s estimated perception by reading
other adjectives and the descriptions of their positive and nega-
tive experiences.
We found from the research data, a total of 343 adjectives
from which 120 were unique. We focused on those adjectives
that appear more often than rare adjectives to obtain an under-
standing of the debtor’s common opinion about debt collection
agencies. In addition, we searched the data for those adjectives
that are antonyms of each other or adjectives that are close or
connected to each other.
Finally, the adjectives were analysed using logic and real life
use and combinations with other adjectives that the same re-
spondent mentioned in his or her answers. These logical analy-
ses and combinations are connected to ethical theories for un-
derstanding more deeply the debtors’ attitudes toward debt
collection agencies.
Findings
The research data shows that there are a total of four adjec-
tives within the responses that are repeatedly used to describe a
debt collection agency from the perspective of the debtors, and
these include ‘expensive’ (28 times), ‘greedy’ (23 times), ‘extor-
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tionate’ (21 times) and ‘uncompromising’ (20 times) (see Table
1). After these adjectives, the next most often repeated on the
list does not even reach a count of ten. We classify these four
adjectives as key elements in the description of debt collection
agencies from the debtors’ point of view.
The next most common adjectives that appear 8 or 9 times
include ‘flexible’, ‘oppressive’, ‘threatening’, ‘criminal’, ‘efficient’
and ‘frightening’. From these ‘threatening’ and ‘frightening’ are
close to each other, and therefore we can propose the combina-
tion of ‘threatening and frightening’ as one of the key elements
when their occurrence is counted together in the research data
(total 17 times).
As every respondent had the opportunity to list three adjec-
tives, some of them are reduced or classified as the same – ap-
pearing quite often with the adjective ‘expensive’. The adjec-
tive ‘expensive’ appeared 28 times in total but only 23 of the
respondents mention it, meaning that it was duplicated five
times in the answers. The same occurrence appeared with other
adjectives as well, albeit rarely.
Adjective Occurrence Percentage
Expensive 28 19.5
Greedy 23 19.5
Extortionate 21 15.3
Uncompromising 20 16.1
Threatening and Frightening 17 12.7
Table 1. The occurence of adjectives
Combining the results by searching for those respondents
who used one or more of the key elements ‘expensive’, ‘greedy’,
‘extortionate’, ‘uncompromising’ or the combined adjective set
of ‘threatening and frightening’ to describe debt collection agen-
cies, as much as 67.8% of the debtors’ attitudes toward debt col-
lection agencies is explained. Our key elements therefore give
a reliable picture of the debtors’ perception of debt collection
agencies.
We could conclude that overall the most common percep-
tion arising from the research data about debt collection agen-
cies from the debtors’ standpoint is ‘a frightening business
entity’ which is ‘expensive’ for a debtor and greedily demands
payments without making compromises. This presents a cold
and stony picture of debt collection agencies in general. Could
we see this negative perception even as a consideration of some-
thing harmful for the debtor? Robin (2009) states that ethics is
at least partly defined to prevent substantial harm, and there-
fore we can even ask: Do debtors consider debt collection as
unethical rather than ethical? Two respondents claim that debt
collection agencies are directly immoral.
However, positive perceptions also appeared, such as ‘flex-
ibility’, ‘polite’ and ‘well-mannered’ as well as ‘understanding’.
We categorised these positive perceptions into three different
themes: adaptive, truthful and well behaved.
Expensive debt collection
Within the research data, the adjective ‘expensive’ gained the
highest occurrence; even 19.5% of debtors mentioned this ad-
jective in their responses. The adjective ‘expensive’ is therefore
a strong descriptor of the debtors’ perception of debt collection
agencies.
The word ‘expensive’ can be understood through three differ-
ent meanings – the first being what it literally means that some-
thing has a high price, that it is costly. One could also describe
something as ‘expensive’ by stating that it is dear, important or
having a high value. Moreover, especially in our context, one
could use ‘expensive’ to mean that something is difficult to af-
ford with his or her financial resources.
The adjective ‘expensive’ is somewhat strange in this context
as it creates the idea of person P planning to buy product or
service X, but P thinks that X has a high price. However, the
nature of the debt collection is such that a third person – more
accurately the creditor – has selected a debt collection agency,
and therefore has already ‘bought’ a service and the debtor is
just covering the creditor’s expenses to the debt collection agen-
cy. P therefore does not have any power over the selection of
the service, and yet P perceives the service as ‘expensive’ as it is
P who is paying the price of the service.
Among the three initial meanings of the word ‘expensive’, the
second one can be considered irrelevant. It is difficult to imagine
that any debtor would refer to a debt collection service as dear,
important or high in value by stating it is expensive. The other
two meanings can, however, apply to how debtors actually per-
ceive the collection agency.
Some collections services (X) can also be expensive, and
therefore have a high price in two different meanings – that it is
too expensive compared to the value that is gained from paying
the price or that the price is correct in comparison to the value
but it is high compared to one’s financial means. Obviously,
these can both be true as well.
The debtor can think that the debt collection fee is too high
compared to the service he or she receives – that the service con-
tribution does not match the asked fee. This can also be because
the debtor did not select the service at all – he or she might
think that it was totally unnecessary to use a debt collection ser-
vice against him or her, and therefore any price would be seen
as ‘expensive’. The debtor could also accept the actions taken to
collect the debt, but think them unnecessarily heavy – that the
same result could have been gained with less effort. In a further
scenario, the debtor could accept the actions and their scale, but
perceive the fees as being too high in comparison to the actions.
We can imagine that for many debtors the situation is such
that they are incapable of paying their obligations, and there-
fore the debt collection fee is hard to pay.
What would a contrary adjective be then – what are the anto-
nyms of ‘expensive’? Literally as expensive is something that has
a high price then the antonym is something that has a low price,
and therefore cheap or inexpensive. It sounds strange, however,
to describe a debt collection agency as cheap or inexpensive as
the price (debt collection fees) are more like damages that need
to be covered – they are more likely to be described as “reason-
able fees” or “agreeable fees”.
Among the debtors’ answers in the research data, none of
these antonyms or even close equivalents exist. We can then
assume that ‘expensive’ as a description of the debt collection
service is more on that a type of perception where the debt col-
lection actions are more unnecessary in total or part than they
are acceptable and simply hard to afford. For example, the word
‘useless’ appears in the research data (three times), as the debtor
thinks that the debt collection services are unnecessary.
Instrumental goodness or badness (or a poor instrument)
is related to the function of the debt collection agency to deal
with unpaid monetary liabilities. Instrumentally, the service is
then about money and trust. As Levinas (2007) states, money
is nothing other than human labour transferred into measur-
able units. The adjective ‘expensive’ is closely connected to these
theories.
As we imagine a debtor who agreed to purchase a service
or good at a certain price; therefore, the debtor was ready to
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spend a certain amount of his or her measurable labour units,
we can assume that he or she is often satisfied with the terms
of agreement and time of purchase. When the debt collection
agency adds interest as a penalty to the price and their fees then
the price differs from the principal price – and hence the use of
adjectives like ‘expensive’ or even ‘extortionate’ comes from the
effect of the higher price.
As it might take a long time from the actual purchase and
the debtor might hardly remember the value of the service or
goods, then it is understandable that they may perceive the debt
collection as expensive. The perception that the service is too
expensive may be a consequence of realising or remembering
the original principal price.
Greedy debt collection
The adjective ‘greedy’ is the second most commonly occurring
among the research data – 19.5% of the debtors in the research
describe debt collection agencies as greedy. The word ‘greedy’
can be understood in many ways depending on the context.
The most relevant in the debt collection context is the defini-
tion of the desire to acquire or possess money – greed is ‘having
an excessive desire to acquire or possess money’. Furthermore,
‘greedy’ can be understood as the wish to possess more than
what one needs or deserves.
Yet the adjective ‘greedy’ has another meaning, such as the
desire to eat or drink excessive amounts or being eager for pur-
suit such as being eager for the opportunity to prove one’s abili-
ties. We assume that our respondents were not meaning that
kind of greedy, and in this context it is more about the greed
associated with acquiring or possessing a lot of money.
It is no surprise that a debtor perceives a debt collection agen-
cy as someone with an excessive desire to acquire money, as it
is obvious what debt collection agencies exist for – to gather
money from debtors who are not paying on time. The debt col-
lection service would not be good at debt collection if it were
not conducting its work by showing a strong desire to collect.
However, does the debtor perceive the debt collection agency
as greedy because it collects money for a principal creditor so
eagerly or for the debt collection agency itself? We would say
that the debtor does not distinguish where the money ends up
after the debt collection – with the debt collection agency or the
principal creditor. As it is the debt collection agency who makes
all the demands, all the greediness is reflected in the debt col-
lector – even that greediness that has its roots in the creditor’s
conduct.
As Hülsmann (2008) states the business has a tendency to
encourage vices such as greediness, but is greediness really a vice
for a debt collection agency? Could it even be seen as a virtue as
it is what the debt collection agencies are there for – to ensure
cash flow for its clients. Yet surely for a debtor it can be seen as
a vice.
As the word ‘greedy’ can also be understood as the desire to
possess more than one needs or deserves, we can analyse wheth-
er the respondents show such a perception. That would mean
then that in the debtor’s view the debt collection agency is will-
ing to get more than they deserve or more than they need. This
logically means that the debt collection agency does not have
the right to get that much. The debtors’ perception can also be
questioned if they think the debt collector is stealing something
through criminal activities – there seems to be such evidence
in the research data as the word ‘criminal’ was mentioned eight
times in the research data (6.8% of the debtors perceive debt
collection agencies as criminal). Among those eight who per-
ceive debt collection agencies as criminal, three of them also use
the word ‘greedy’ when describing a debt collection agency.
Another occurrence in the research data that creates a similar
connection suggesting that the debt collection agency does not
deserve what they demand is the word ‘unfair’ – the debtors
mentioned ‘unfair’ five times when describing the debt collec-
tion agency. Again, one of those who described a debt collection
agency as ‘unfair’ also used the word ‘greedy’.
It seems then that at least some debtors perceive debt col-
lection agencies as demanding something they do not deserve
– even attempting to get that unlawfully via criminal means.
The word ‘greedy’ has antonyms such as ‘generous’, ‘benevo-
lent’ or even ‘altruistic’. These adjectives or even close equiva-
lents do not appear in the research data at all.
Extortionate debt collection
The adjective ‘extortionate’ appeared 21 times meaning that it
explains 15.3% of the attitude of debtors toward debt collection
agencies. The adjective ‘extortionate’ also appeared with the
same respondents’ responses duplicated three times – therefore
only 18 respondents used it. The word ‘extortionate’ is closely
connected to the word ‘expensive’ albeit with a more negative
meaning than mere ‘expensive’, yet only two respondents men-
tioned both ‘expensive’ and ‘extortionate’.
The word ‘extortionate’ means something that is illegally
used in its official position to obtain property. It greatly exceeds
the bounds of moderation. For instance, an extortionate price
which is too high and thus more than just expensive is outra-
geously expensive. Antonyms for extortionate, for instance,
would be reasonable, fair or inexpensive – similar to the word
expensive in our context. We can clearly see a connection be-
tween the words ‘expensive’ and ‘extortionate’.
As with the word ‘greedy’ we see that some debtors tend
to perceive debt collection agencies as demanding more than
they deserve – even through criminal activities. We can also
see mentions of the word ‘extortionate’ in a similar manner as
when debtors perceive debt collectors as demanding outrageous
amounts. This raises the question of what makes them think
the debt collector’s demands are more than just expensive –
even extortionate.
One explanation might be fees and the interest penalty, which
are both seen as something extra that a debt collection agency
adds to the principal claim. Many times, especially in the case of
small business creditors, the creditors are not demanding pay-
ment of interest at all, even though the debt has remained un-
paid for a long time – and it is the professional debt collecting
agencies that calculate and add the interest to the claim as well
as the fees based on their activities. The principal unpaid errand
therefore becomes unfairly expensive from the debtor’s stand
point, and is perceived as extortionate.
Yet it is possible that one claims a debt collection service to
be extortionate in another manner than just price – such as the
terms of the payment. As debt collection agencies tend to de-
mand payments instantly or unreasonably quickly after the first
contact with the debtor, which the debtor can then perceive as
an extortionate demand.
Uncompromising debt collection
The word ‘uncompromising’ also appeared frequently in the re-
search data and this explains the debtors’ attitude for 16.1% of
the respondents. The word ‘uncompromising’ is slightly differ-
ent to the words ‘expensive’, ‘greedy’ or ‘extortionate’ as it can be
understood as legally correct but not flexible in conduct.
The word ‘uncompromising’ refers to someone that does not
make concessions, and is inflexible in negotiations. Neverthe-
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less, it means that the one who describes the other as uncom-
promising tends to think that the other party in the negotiation
has the right to stick to his or her opinion – that it is not legally
or ethically wrong to refuse any concessions. Still the debtor can
consider this bad and at least the debtor could say that he or she
does not like how the negotiations went.
The debt collection agency’s professional conduct demands
that they comply with the creditor’s orders as well as protect
the creditor’s interests in their actions and negotiations with the
debtor. As the debt collector is acting on behalf of the credi-
tor, compromises in certain situations are legally impossible,
although sometimes compromises can be part of good debt col-
lection conduct, and some debtors seem to recognize this, as the
word ‘flexible’ is even mentioned nine times.
We can imagine a debtor asking for some flexibility from a
debt collection agency, and that agent then refusing to make
any concessions. The debtor therefore could easily perceive
such a refusal as inflexibility or being uncompromising. But
what makes the debtor think the debt collection agency’s refusal
as unfair? If it is considered unfair, it means that in the debtor’s
ethical worldview, the debt collection agency should have un-
derstood his or her situation better and agreed with him or her.
The perception of unfairness is where the debtor still thinks
that the debt collector is working according to the laws and
regulations, but is kind of insensible or uncaring. The adjectives
unfair, insensible and uncaring appeared in the research data
several times helping to explain 9.3% of the debtors’ perception
of the debt collection agency.
Yet if a debtor perceives the refusal described above so
strongly as wrong that it is even seen as being against the law or
good manners from his or her point of view – how would he or
she even consider that as uncompromising behaviour anymore?
In such cases, we propose that the debtor’s perception moves
towards ‘extortionate’, ‘greedy’ or even ‘criminal’ in their evalua-
tion of debt collection agencies.
The debt collection agency as a threat
The combined results of the adjectives ‘threatening’ and ‘fright-
ening’ counts as high as 12.7% of the debtors’ perception of debt
collection agencies. We can understand that something consid-
ered a threat is frightening or threatening. When some issue
is considered a threat, it logically means that some bad or evil
might happen – and many times it is also because of a lack of
knowledge of the bad or evil that might happen.
The word ‘threatening’ means foreshadowing with evil or
tragic developments. The legislation in Finland demands debt
collection agencies to clearly tell the truth to a debtor about
what happens if the debtor does not comply with the pay-
ment methods mentioned during the debt collection. These,
often written, descriptions of the proposed actions may be seen
threatening.
According to Aristotle, emotions are our built in alarm sys-
tem for ethical matters (see Brown & Mitchel, 2010) and as
the perception of something as frightening is emotional, we can
consider that the debtor could see the debt collection as alarm-
ing and unethical.
As the debtor sees the debt collection agency as a threat, this
can mean that in the debtor’s view debt collection activities
make something in his or her life worse. We can imagine that
this involves monetary issues, but may also involve social status
through the possible shame from their social network and the
social pressure on the debtor.
The debtors’ positive perceptions
Some adjectives in the research data can be considered positive
in their nature, and we see them in a broader sense by combin-
ing some of them according to their close connection to each
other. We found three positive themes expressed through the
adjectives ‘adaptive’, ‘trusting’ and ‘well behaved’.
Under the term ‘adaptive’, we gathered adjectives such as flex-
ibility, understanding and conciliatory. This kind of theme can
be found from 9.3% of the respondents. The common factor for
these debtors is their perception of a debt collection agency that
is at least sometimes adapting to the debtor’s situation – willing
to make some concessions, understanding the debtor’s bad situ-
ation or conciliatory towards some dispute with the creditor.
The debt collection agency was viewed as trusting in 5.9%
of the respondents’ answers. Yet there were also two who de-
scribed the debt collection agencies as untruthful, which is to-
tally the opposite. Trusting refers to the idea of maintaining
privacy and valuing this highly.
Good manners, friendly behaviour and polite conduct also
arise from quite a number of the answers. As much as 10.2%
of the debtors perceived the debt collection agencies’ conduct
as good behaviour towards them. Yet again contrary adjectives
also appeared.
It seems that the debtors value a flexible and understanding
approach with polite communication within a trusting environ-
ment and maintaining privacy.
Debtor's perception affecting the debt collection
agent
Business ethics in general involves the economic system, or-
ganization and individuals (Lozano, 1996). In our context, the
individual is a debt collection agent and the organization a debt
collection agency. The part of the economic system is the reality
where the debt collection work is conducted – among debtors.
The debtors’ perceptions of the debt collection agencies are part
of the business ethics of debt collection.
As our analysis shows, more than two thirds of the debtors’
attitudes are explained through the terms ‘expensive’, ‘greedy’,
‘extortionate’, ‘uncompromising’, ‘threatening and frightening’.
The debt collection agents’ daily work involves dealing with
people who perceive the organization that he or she represents
mostly negatively. Reasoning their actions through well-estab-
lished moral codes with advice from a moral manager (Treviño,
2000) would be very helpful in the whirlwind of ethical dilem-
mas that exists surrounding the debt collection agent’s conduct.
The debt collection agent’s daily work is full of decisions
which can be understood as judgements in certain situations or
in relations to certain issues, such as whether to give one week
more to a debtor to pay up or not. These judgements are more
or less rooted in ethical evaluation processes. These judgements
can be singular or comparative (Sparks, 2010) in nature – with
or without multiple options or previous similar situations for
comparison. These judgements are based on the employee’s
own moral codes and the rules of discipline within the organi-
zation – if those rules remain vague, conflicts could arise in re-
gard to the perceived pursuit of proper ethical considerations
(Allisson, 1998).
The debt collection agent’s ethical judgements strongly affect
the debtor’s perception of debt collection. If the debt collection
agent gives one week more to pay, then maybe the debtor won’t
evaluate the debt collection service as uncompromising while at
same time the creditor may evaluate the debt collection service
as less professional. To compromise may therefore be against
the debt collection agent’s profession, but surely compromises
EJBO Electronic Journal of Business Ethics and Organization Studies Vol. 23, No. 1 (2018)
19 http://ejbo.jyu.fi/
can be the right method in some situations – depending on
multiple factors. This can similarly be applied to the other ad-
jectives identified in this research.
Conclusion
The debtors perceive the debt collection agencies as expensive
and sometimes even extortionate as well as greedy, uncompro-
mising and even threatening. As we assumed, the debtors’ per-
ception of the debt collection agencies overall was not quite pos-
itive, but how it is perceived is now explained more clearly and
in detail. Nevertheless, positive perceptions did appear such as
flexible, understanding, trusting and well-mannered.
The main task of the debt collection agencies is to collect
unpaid amounts for its creditors while protecting the creditors’
interests. The debt collection service is ordered by the credi-
tor, but in addition to the creditor the debtor also evaluates the
service from his or her point of view as the target of the debt
collector’s actions. What might be good for the creditor is not
necessarily good for the debtor and vice versa.
According to the rules of the debt collection industry, debt
collection fees are mostly demanded from the debtor; therefore,
the creditor ‘buys’ a service which is ‘paid for by’ the debtor.
The nature of the debt collection industry is that one requests
a service and another is obligated to pay it, and this creates dis-
satisfaction for the debtor. That disappointment can be seen in
the often mentioned adjectives such as expensive or extortion-
ate debt collection in relation, for example, to the pricing of the
service.
The work of the debt collection agency is to collect money for
the creditor, which the debtor perceives then as a greedy trait.
Protecting the interests of the creditor is perceived as uncom-
promising conduct. It seems that the debt collection agency is
evaluated negatively among debtors. Could that even be seen as
the vice of coldheartiness, as Hülsmann (2008) describes the
process whereby the creditor hires a debt collection agency to
carry out the ugly part of their business demands?
Money is considered instrumentally good in the sense that
monetary units can be exchanged for a good or better life,
and the research data shows that debt collection is connected
to money through the adjectives ‘expensive’, ‘extortionate’ or
‘greedy’. This could be understood as lowering the effectiveness
of money as a source of a good life and that money is therefore
a bad instrument from the debtor’s point of view.
Among the positive perceptions flexible, polite and preserv-
ing privacy are highly valued, and so we could see these as guide-
lines for an employee of a debt collection agency to improve
their conduct and more easily deal with the pressure of the
ethical challenges of the work of a debt collection agent. When
comparing these positive traits, the debtors refer to quite differ-
ent virtues to those we identified in a previous study (Jalonen &
Takala, 2016) investigating debt collection agents in their work.
Surely some of them are loosely connected such as trustworthi-
ness and telling the truth, yet being flexible or conciliatory are
something different. This raises the issue that different players
in the debt collection environment might expect their own set
of virtues from the debt collection agent.
In our previous study (Jalonen & Takala, 2016), debt collec-
tion agents were shown to avoid saying that they are working
in a debt collection agency in order to avoid jokes about motor-
cycle clubs and other harmful perceptions from people who do
not actually know what it is really like to work as a debt collec-
tion agent. This research provides further information about
how demanding it is to work in a debt collection agency, while
also hinting at potential areas that conflicts might appear and
what the debtors value most highly.
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Authors
Jarkko Jalonen, CEO, SPT-Group Ltd
Email: jarkko.jalonen@sptgroup.fi
Tuomo Takala, Professor, Head of Management and Leadership, Jyväskylä School of Business and Ecomics
Email: tuomo.a.takala@jyu.fi
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  • M Brown
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Sociality and money. Business Ethics: A European Review
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