Messages Committing You to Reciprocate

Abstract

The article presents the results of a field experiment that uses ‘nudge’ type influences as the content of text messages targeting a specific group of debtors of one of the fast loans company’s operating in Bulgaria. This is a group consisting of so-called ‘contactless’ clients, the ones that stop paying their instalments and cut all the communication with their creditor during the COVID 19 isolation phase. We define the term nudge and also explain the differences between the traditional debt collection process and the behavioural approach to collection. We reveal the impact of nudging sms messages that make debtors feel committed to reciprocate, which is a specific automatic effect on the decision-making process. Those text messages significantly increased the probability of the debtors responding to the invitation for credit restructuring, compared to when the standard message was sent. Therefore, it is important to implement new behavioural approaches in existing debt collection strategies in the context of the new social reality created by the COVID-19 pandemic.