As Consumers’ Debt Burdens Rise, Government Agencies Have Opportunities to Better Assist Them with Key Services

April 30, 2024 at 08:00 AM EDT

CHICAGO, April 30, 2024 (GLOBE NEWSWIRE) -- U.S. consumers’ median minimum monthly debt payments grew by 32% between 2020 and 2023 – surpassing the rate of inflation (18%) during the same time. As consumer debt obligations continue to rise, a new TransUnion (NYSE: TRU) public sector study explores ways government agencies can better assist their constituents.

The study, “Navigate New Consumer Financial Strains: How Government Agencies Can Strengthen Customer Experiences,” included both TransUnion consumer credit and Bureau of Labor Statistics data from December 2020 to December 2023.

“There are a host of economic conditions, like inflation and higher interest rates, that are making life increasingly difficult for consumers,” said Jeffrey Huth, senior vice president and head of TransUnion’s public sector business. “Financial stress can often lead to constituents needing access to critical government programs, so it is crucial agencies identify people who are struggling and reach out with appropriate information and support.”

While increases to minimum monthly payments are concerning, the report highlights disparities among several key demographic groups, based on generation, homeownership and geography.

Minimum monthly debt payment growth from 2020 to 2023

Ages 18 to 29	Grew by 74%	Ages 60+	Grew by 11%
Renters	Grew by 54%	Homeowners with mortgages	Grew by 31%
Urban	Grew by 35%	Rural	Grew by 25%

The report identifies three core groups of consumers based on their financial standing that government agencies must be aware of: those experiencing hardship, feeling pinched and expecting the worst. It also includes recommendations for government agencies to increase and improve outreach, access to services and program integrity.

Experiencing hardship
This subset of consumers utilize existing credit at significantly higher rates compared to other consumers, suggesting they may be relying on a dwindling reserve of available credit to make ends meet. The group is also growing primarily in zip codes with the lowest deciles for median household income, and is the most in need of services and support.

“Reducing friction to the enrollment process is one of the most effective means to delivering aid to more constituents who may not have the resources and skills necessary to navigate complex systems,” said Huth.

Agencies can streamline enrollment by leveraging robust identity and device intelligence, like those enabled via the TruValidate™ solution line. These solutions allow for a friction-right approach that expedites legitimate online applications and inquiries via the phone, while protecting agencies against fraud.

Feeling pinched
This group of consumers contains those whose debt payment obligations are outpacing inflation and income growth. While this group is currently able to pay bills and purchase necessary goods and services, they may be relying more on credit to do so. These constituents are more likely to need help in the future due to their potentially precarious position.

The report notes that consumers feeling pinched would likely benefit from better awareness of available assistance from government agencies to reduce potential anxiety. Program managers can leverage marketing solutions, like TransUnion’s TruAudience® line of solutions, to engage individuals and families most likely to experience financial hardship.

In addition, phone calls often play a critical role in conducting outreach and building trust with stakeholders. To improve call experiences, and minimize robocalls, call spoofing, and spam mistagging, agencies can leverage outbound call solutions, like TruContact™ Trusted Call Solutions, to ensure legitimate calls get through. Branded Call Display (BCD) can also help agencies improve engagement by enabling them to add their name, logo and reason for the call to the mobile phone display, so constituents know and trust who’s calling, and answer the phone.

Expecting the worst
Some consumers may be anticipating a recession. As a result, they are actively paying down debt, cutting back on discretionary spending and increasing overall savings. “While this group does not need immediate support, they still should feel confident in the government’s ability to effectively deliver services, steward taxpayer dollars and protect constituents from bad actors posing as government agencies to commit fraud,” added Huth.

State and Federal programs can better steward resources by employing identity solutions to verify that people who enroll in programs are legitimate. They can also mitigate risks to constituents from imposter scams by registering inbound-only numbers with Do Not Originate (DNO) services, so calls that aren’t from the agency can be stopped before they ever get to the constituent.

“As government agencies seek to increase equity and accessibility for their programs, they have an opportunity to improve trust and confidence in the government’s ability to protect constituents,” said Huth. “Leveraging the right identity and trusted call solutions can help them meet both objectives simultaneously."

Click here to read Navigate New Consumer Financial Strains: How Government Agencies Can Strengthen Customer Experiences.

About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business