According to Luís Salvaterra, General Director of Intrum Portugal, “it is likely that a consumer who cannot pay all their bills will stop paying companies with whom they have no empathy. Among consumers who feel less guilty about not paying their bills, concern about “greedflation” is even more pronounced.”
On the day World Consumer Rights Day was celebrated, Intrum published the results of its European Consumer Payment Report study, which reveal that as there are more and more people with less money in Portugal, non-compliance with bill payments is also increasing.
According to Luís Salvaterra, General Director of Intrum Portugal, “it is likely that a consumer who cannot pay all their bills will stop paying companies with whom they have no empathy. Among consumers who feel less guilty about not paying their bills, concern about “greedflation” is even more pronounced.”
“Although there may be many reasons behind a late payment – from the consumer not having money, to simply forgetting to pay – Intrum data suggests a change in social norms”, says the study.
“Currently there is a growing acceptance of ignoring bill payments and at the same time, consumers say they are aware of companies that try to exploit their difficulties through tactics such as greedflation – increasing prices more than is justified by their costs or to keep prices high even when their production costs decrease”, concludes the European Consumer Payment Report study.
“With late payments or non-payment becoming endemic, consumer attitudes appear to be changing,” argues Intrum.
The results of the Intrum study indicate that consumers are re-evaluating what they consider acceptable when it comes to ignoring invoices, which is causing great concern for companies. According to the European Consumer Payment Report, three in ten respondents (29%) say they would now feel less guilt about skipping a bill payment than they did a few years ago.
The study concludes that “in the near future, we can expect an even greater proportion of consumers not to make payments on due dates”.
“Around two in ten of Portuguese consumers (18%) fear not paying a bill for a low priority service in the next 12 months, that is, a payment not linked to housing or energy costs”, says Intrum, which considers This is a worrying trend for financial institutions and companies.
Companies considered unethical may suffer a greater number of ignored payments, says Intrum.
“Consumers recognize that the companies they buy from are also experiencing difficulties in the current economic context. However, they are alert to companies that may be trying to take advantage of their financial situation – and want to ‘get revenge’ on them”, he adds.
According to Intrum, more than two thirds of Portuguese consumers (69%) say they would stop spending money with a company they consider to be practicing “greedflation”, a neologism that combines “greed” (greed) and inflation .
Financial services companies that charge high interest rates on loans but offer low remuneration on savings accounts can also be accused of this, concludes Intrum.
On the other hand, companies that position themselves as allies of consumers should benefit from this stance.
Around half of consumers say they prefer to buy from companies that offer flexible payment terms and 72% consider it to be socially responsible for companies to offer flexibility during periods of economic slowdown, the analysis finds.
Intrum also highlights that as default increases, it is expected to see an increasing number of debt collection and bad credit cases in Portugal.
Businesses – large and small, will face more challenges from customers struggling to meet their financial obligations in 2024, Intrum concludes.
