The extensive literature on credit often views default as a deviant aspect
of credit relations. Lenders use various strategies to manage risk and avoid or minimize
defaults. Borrowers are encouraged to budget carefully to avoid being labeled as bad
consumers. Legal, cultural, and religious factors all stigmatize default. Yet, default
persists and isn’t a dead end for debt relationships. Historically, responses to default
include debt slavery, imprisonment, harassment, marginalization, debt collection,
foreclosure, debt forgiveness, and credit restructuring.
While much scholarly attention has focused on default patterns, credit
restructuring and debt collection are less studied. Although there are works dealing with
those default patterns of personal debts from a sociological and anthropological point of
view, these works revolve around the dynamic and complex relationship between debtors and
creditors, emphasizing how debt restructuring and communication strategies shape this
interaction (Bauman, 2010; Deville, 2013, 2015a, 2015b; Hochschild, 2012; Langley, 2008; Manning, 2000; Marron,
2009; Taylor, 2002; Trumbull, 2014; Yudin & Pavlyutkin, 2015; Mertens & Metz,
2022; Rao & McDonald, 2023).
The overall idea behind those works challenges the simplistic view of debt
as purely exploitative, highlighting the bargaining power debtors possess through credit
restructuring and the nuanced tactics creditors employ to ensure repayment. These strategies
include extending credit to maintain customer loyalty, using social stigma, and employing
polite but firm communication to encourage repayment. However, these works that are
discussed briefly below are merely pointing either a macro or micro aspects of default
patterns. A Goffmanesque frame analysis enables us to find a “loose coupling” that relates
micro aspects of credit restructuring to the macro (power) structures of social life (Goffman, 1983, p. 11).
Debtors in Haiti, despite often being seen as exploited, hold significant
bargaining power through credit restructuring, as merchants extend credit to creditworthy
customers to maintain business relationships (Belshaw, 1965). This dynamic
reveals that debt relationships combine both exploitation and strategic accommodation, as
evidenced by the Mauritian Indian “rolling/roulement” system (Benedict,
1964) and the working-class families in Newcastle managing debts through partial
payments and balance rollovers (Taylor, 2002), as well as farmers with
seasonal incomes, whose extended credit periods can lead to higher prices and sometimes
usury. Communication plays a key role, as creditors assess debtor behavior -whether
reckless, unfortunate, or professional (Rock, 1968)- to decide on the
course of action, and in small communities, face-to-face interactions allow for subtle yet
effective pressure on defaulters (Yudin & Pavlyutkin, 2015). In the
U.S., creditors exhibit more tolerance for delayed payments, assuming good intentions (Marron, 2009), while sellers factor in a certain default rate when
setting prices (Caplowitz, 1967). Credit card systems show how revolving
credit fosters a continuous debt cycle, benefiting banks through perpetual profits (Manning, 2000; Trumbull, 2014; Langley, 2008), though Bauman criticizes this for exploiting low-income
individuals (Bauman, 2010). Meanwhile, non-performing loan (NPL) markets
have emerged, where specialized companies buy bad loans at low prices, often using emotional
tactics to pressure repayment, despite complaints about their services (Deville, 2013, 2015a, 2015b).
Ultimately, debt collection mixes stigmatization, harassment, negotiation, and compromise,
illustrating the complex interplay between creditors, debtors, and broader social dynamics
(Mertens & Metz, 2022).
In summary, while debt restructuring allows creditors to maintain customer
relationships, it also grants debtors significant leverage. Effective communication and
strategic use of social and emotional pressures are vital in managing and collecting debts.
The works discussed briefly here points out all these micro aspects together with the macro,
mostly political economical aspects. However, the link between these micro aspects and macro
(power) structures is missing in these works. Relying on the data derived from
ethnographical research employed in a debt collection training workshop for the AMC
employees and a discourse analysis of the complaints of AMC customers posted to
Şikayetvar, a customer complaint platform in Türkiye, this study aims at analyzing
the Goffmanesque frames within which AMCs restructure both the (in)formal default
patterns of personal debt relations while they restructure the non-performing loans.
Goffman’s frame analysis links interactional practices with social structures, collapsing
them into broader categories (Goffman, 1983; Preda,
2017; MacKenzie, 2019). This linkage requires describing the
structural aspects of credit restructuring.
Hence, this study employs a mixed-methods qualitative approach, combining
a netnographic study of a debt collector training workshop with discourse analysis of debtor
complaints on Şikayetvar, a Turkish consumer complaint platform. By analyzing both
industry perspectives and debtor narratives, this research uncovers the discrepancies
between the official discourse of AMCs and the lived experiences of defaulted borrowers.
The research aims to answer the following questions:
-
How do AMCs structure debtor interactions through
communication strategies and financial incentives?
-
What tactics do AMCs employ to enforce repayment, and how do
these practices align with or diverge from their public narratives?
-
How do debtors respond to AMC strategies, and what does this
reveal about power dynamics in debt collection?
In what follows, the paper first presents the theoretical framework,
drawing on Goffman. It then provides an overview of Türkiye’s financial system and the role
of AMCs in debt restructuring. The methodology section details the research design, followed
by an analysis of findings from the workshop and debtor complaints. The paper concludes by
discussing the implications of these findings for an understanding of consumer debt
restructuring.
Context
Chaining yourself to the debtor’s door: road to restructuring
process
In the section of his book Economy and Society where he
discusses the concept of “development of freedom of contract”, Max Weber states that the
debt is essentially a kind of interest-free emergency aid between brothers. The debt
relationship, which is not between brothers, i.e., members of a kinship group or a
guild, or as between patron and client, cannot be sued even though it is not subject to
the prohibition of interest. Accordingly, if the debtor loses his loyalty to his debt,
the only thing a creditor can do is to hope the help of magic. In China, the creditor
would commit suicide and threaten that his soul would follow the debtor after his death.
In India, the creditor would chain himself to the debtor’s door and go on a death fast
and force his children to take revenge if the debtor did not give up before he died (Weber, 1978, pp. 677-678). Anthropological studies suggest that even
the exorbitant interest rates of moneylenders were not considered strange in India, and
it was believed that debtors who were crushed under these interest rates and could not
pay their debts would become slaves or even horses or oxens of their creditors when they
were reborn (Graeber, 2011, p. 12). In addition to anthropological
and archaeological studies pointing to examples of slavery arising from debt in
Mesopotamia, Africa, Far Asia, Americas and Europe (Chirichigno, 1993;
Hudson, 2018; Rosenthal, 2018), the existence of
debtors’ prisons is also known during the emergence of the modern state. Although the
practice of imprisoning the debtor and restricting his freedom has disappeared in many
countries and in most cases, practices such as seizing the debtor’s assets, enforcement
and seizure still continue to exist. On the other hand, considering that interpersonal
indebtedness is mostly verbal and organized through ties such as blood ties, neighbors,
and colleagues, in such cases, mechanisms such as magical procedures and social
exclusion and stigmatization mentioned above are in effect as a coercive force for the
collection of unpaid debts.
Therefore, default resulted not only in legal mechanisms such as
enforcement and seizure, but also in being faced with a deterioration of the debt
payment record, exclusion from the credit market, or exorbitant interest rates applied
by usurers or banks. This situation became a kind of financial expropriation, with a
greater portion of people’s disposable income going to interest payments, making the
debtor’s repayment capacity to become increasingly difficult with the exorbitant
interest burdens he assumed. As a result of this cycle, which leads to a spiral of more
debt and more exorbitant interest, credit records turned into credit scores and became a
kind of “self-fulfilling prophecy” (Merton, 1968, p. 475 ff.). Within
this vicious cycle, credit restructuring has been claimed to provide a way out. Apart
from administrative and legal proceedings, another method followed for credits in
default is restructuring. Restructuring involves financial and legal measures taken by
both parties to get out of the current default situation with the least damage. While
debtors avoid situations such as enforcement, foreclosure, and additional negative
impacts on the credit score, the creditors seek ways to save at least the principal
amount of the credit.
After the 2001 banking crisis in Türkiye, as a result of the real
sector falling into trouble and increasing defaults, a restructuring program, inspired
by the “London Approach”
1
, called the “Istanbul Approach”, was designed. The restructuring program was
implemented with the approval of the “Financial Restructuring Framework Agreement” on
June 4, 2002. Although it initially targeted commercial credits rather than consumers,
over time, the Istanbul Approach guided similar restructuring efforts in consumer
credits. The first and most well-known of these efforts was the Halkbank
Debt Restructuring Program, which was launched in 2009 with the slogan “Take a
Breath”. Hüseyin Aydın, the then Halkbank General Manager, stated that the debts
restructured for longer periods and based on current interest instead of default
interest. This was “the debt restructuring program with the most favorable conditions to
date”. According to the program, additional interest discounts were offered to people
who wanted to pay their debt in one lump sum within three months at the latest (Halkbank, 2009). In addition to such mass restructuring programs,
there were also debts restructured according to individual demands. However, here the
debtor must have met the essential conditions and applied, and the creditor bank must
have approved this request. When restructuring is out of the question and due to the
operational costs of overdue receivables, banks transfer the collection of these debts
to various legal consultancy offices or remove these items from their balance sheets by
selling the receivables altogether. The bidders for these overdue receivables in the
secondary debt market are financial institutions known as Asset Management Companies
(AMCs).
“Setting the customers free”: how do AMCs define their service?
The Turkish financial system provides a compelling case for this
analysis due to its unique historical and political context. The 2001 banking crisis led
to widespread credit restructuring efforts, and the Global Financial Crisis further
exacerbated household indebtedness. More recently, high inflation and economic
instability under Erdoğan’s administration have reshaped NPL markets, making Türkiye an
important site for examining consumer debt restructuring
2
.
In the NPL market, buyers are specialized companies purchasing
bad-loans of banks and other financial firms for pennies-on-the-dollar. These bad-loan
buyer firms either attempt to collect the debts or package these assets and sell to
another bad-loan buyer firm. AMCs help banks free their balance sheets of NPLs so that
banks can lend more to households and businesses, thereby improving their profitability
and inducing economic growth by facilitating funding mechanisms.
AMC was established in accordance with the “Regulation on the
Establishment and Operating Principles of Asset Management Companies” published by the
Banking Regulation and Supervision Agency (BRSA) in the Resmi Gazete [Official
Gazette] dated October 1, 2002 and numbered 24893, within the scope of the Law No. 4743
on the Restructuring of Debts to the Financial Sector. Turkish AMCs are licensed
financial institutions subject to the regulations of the BRSA, the regulatory authority
of the Turkish banking industry. By definition, they are joint stock companies
incorporated to purchase, collect, restructure, and sell the NPLs of all financial
institutions, including the Savings Deposit Insurance Fund (SDIF). While there are no
entry barriers, AMCs must obtain permission from the BRSA to initiate these core
activities. The regulations also allow AMCs to issue securities (equities or bonds) with
the sole objective of financing their core activities. If the AMC, which purchases at a
price well below the Unpaid Principal Balance (UPB) value in the balance sheets of
banks, cannot convince the debtor to restructure the NPL, it either collects the debt
through legal means or sells these NPLs by securitizing them.
At this point it is very interesting to see how these AMCs define
themselves. To gain an understanding of these self-definitions, the self-definitions of
the two biggest AMCs can be cited here. Gelecek Varlık is the biggest AMC in the Turkish
financial sector with its 25.6% share within cumulative UPB as of June 2023. The main
shareholder of Gelecek Varlık is Fiba Group, which also established a commercial bank,
Finansbank, in Türkiye in the early 2000s and sold it with a record sale to National
Bank of Greece (NBG) in 2006
3
. Gelecek Varlık defines its mission as follows:
“Our mission is to unchain our customers from
their debt burdens and help them reach financial freedom. Our vision is to
contribute as much as possible to the economy by reintegrating debtors with
innovative approaches. Our fundamental values are trust, effective communication,
innovation, professionalism, and compromise” (Gelecek Varlık,
2024, emphases added).
The second biggest AMC in the sector, which has Vector Holding and the
European Bank for Reconstruction and Development (EBRD) among its main shareholders, is
Dünya Varlık. Dünya Varlık with its 24% share of the cumulative UPB also defines its
aim:
“Our aim is to set our customers free and
help them achieve peace. By using technology to provide a unique customer
experience and adopting a customer-centered approach, Dünya Varlık
distinguishes itself from other AMCs. Dünya Varlık leads its sector in transaction
volume, number of employees and its investors such as EBRD and Vector Holdings” (Dünya Varlık, 2024, emphases added).
Based on such aims and missions AMCs dominate the NPL market and
restructure, collect, and/or package the debts. Defaulted borrowers, who are
marginalized and even excluded from financial system, are resuscitated by AMCs and
re-integrated into the financial system. So goes the story.
Resuscitating the defaulted borrower: NPL market in Türkiye
The first sale of bad loans held by SDIF took place in November 2006,
and in 2008, the sale of private banks’ NPLs to AMCs was approved. So much so that the
NPL sales market has grown steadily since 2006, and the NPL purchased by AMCs from banks
reached TRY 8.6 billion in 2017. NPL sales, which started with TRY 1.7 billion in 2008,
reached TRY 6.1 billion in 2014 after 22 banks, including İş Bankası, Yapı Kredi Bank,
Akbank, Garanti Bank BBVA, QNB Finansbank, Denizbank and TEB-Paribas, put their NPLs up
for sale by auction. Therefore, the loan package purchased by AMCs since private banks
were allowed to sell NPLs in 2008 totaled approximately TRY 62.6 billion as of 2020,
with year-on-year growth of 21.5% between 2008 and 2019. The market, which showed a
steady upward trend after 2011, decreased only in 2015 because the price expected by the
banks was much higher than the price offered by AMCs. According to data after 2008, the
share of consumer credits in the total NPL sales volume until 2018 was 58% on average
4
.
In 2008, the price offered by AMCs in NPL sales was 19.7% of the UPB
value. This high rate was due to the predominance of secured loans in the NPLs sold this
year. As a matter of fact, in 2009, the price realized in NPL sales decreased to 10.2%
of the UPB value. The reason for the increasing pricing rate after 2009 until 2013 was
the intensified competition parallel to the increase in the number of AMCs. At the
beginning of this period, the competition between the two major players of the market,
Dünya and Gelecek Varlık, was decisive. However, with the establishment of Final Varlık
and Efes Varlık in 2011, the competition and pricing rate increased. However, increasing
AMC funding costs after 2013 and some organizations leaving the market, and acquisition
and merger moves between some organizations have brought down the level of competition
and pricing rate. In addition to increasing funding costs and decreasing competition,
Tarmur and Cığızoğlu point out that the NPLs sold by banks consist of increasingly poor
quality and difficult-to-collect credits. For all these reasons, the NPL pricing rate,
which had a downward trend after 2013, reached 6.5% of the UPB value as of 2017 (Tarmur & Cığızoğlu, 2018, p. 14). As of March 2025, according to
BRSA the number of registered and active AMCs has reached twenty-seven.
Over the years, banks started selling their NPLs on a regular basis
(except for 2020), contributing to the increasing NPL sales volume. Although NPL sales
have been increasing steadily between 2008 and 2019, and the largest NPL sales volume in
terms of unpaid principal balance was in 2019 totaling TRY 15 billion, a decrease was
experienced in 2020. This decrease was mostly due to: i) COVID-19-induced uncertainty
(which prevented banks from initiating auctions); ii) stable NPL volume with the support
of forbearance measures introduced by BRSA. NPL sales volume in 2021 and 2022 was TRY
5.7 billion and TRY 12 billion, respectively. Total NPL sales exceeded TRY 85 billion as
of June 2023. CEO of Gelecek Varlık, Sezin Ünlüdoğan, estimated that the total NPL sales
would have been around TRY 16-20 billion for 2023 and the sector was expecting a
dramatic increase in NPL sales in 2024-2025 (Dünya, 27 March 2023).
In particular, EBRD’s investment of TRY 100 billion in Dünya Varlık, the increasing
non-performing loan rates in Türkiye, the increase in the share of non-bank financial
institutions in the financial markets envisaged in the State’s Medium Term Plan, close
monitoring and the completion of legislative changes regarding the securitization of
debts in the non-performing receivable group show signs that the NPL sales market will
develop further. Yet this success story has missed a significant party within credit
relationship, i.e. defaulted borrowers.
Defaulted borrowers have no say in whether and to whom their debts are
sold. They just receive phone calls, letters, and e-mails from an AMC that offers a hand
to save them from an ongoing default. Although the promotions of AMCs underline their
well-mannered staff kindly helping borrowers in getting rid of the burden and stigma of
defaulted debts, there are many complaints about the quality and the language of the
services of AMCs. A netnographical research employed in a debt collector training
workshop for the AMC employees revealed how an idealized and so-called craft of debt
collection process has to be. Such an idealized description of debt collection and
practical realities witnessed on debtors’ complaints together assemble consumer credit
restructuring as a social relationality.
Theoretical background
Erving Goffman introduces the concept of “frame” as a cognitive structure
influencing how individuals interpret social interactions. Frames consist of expectations,
beliefs, or cultural norms guiding people’s perceptions and interpretations. Goffman argues
that individuals constantly engage in “frame analysis,” actively reinterpreting situations
based on their frames to understand complex social interactions and guide behavior (Goffman, 1986).
A “primary frame” is fundamental in Goffman’s theory. It provides a basic
interpretation of events, helping individuals understand “what is going on” and setting the
context for appropriate behavior. Social frames, built on social conventions, roles, and
norms, are used to interpret human interactions (Goffman, 1986, pp.
22-23). In credit restructuring, the primary frame might be “setting a debtor free from
debt,” guiding roles, actions, and expected behaviors such as politeness and cooperation.
The social reality of occasions, however, might be a little bit more complex. To be able to
explain such complexity, Goffman argues that individuals employ keyings, designs and
fabrications, anchors and out of frame activities, and breaking frames.
Keying, borrowed from musicology, involves transforming an activity from
its primary framework into something else perceived by participants (Goffman,
1986, p. 44). Examples include make-believe (pretending a different reality),
contests (competitive contexts), ceremonials (symbolic gestures), technical redoings
(practice or rehearsal), and regroundings (e.g., a wealthy matron working as a salesperson
for charity). These methods transform primary frameworks into varied social interactions.
Sometimes, not keying but certain “design” and/or “fabrication” is
employed by one party to influence or manipulate others’ perceptions. Designs are planned
actions or strategies to control impressions, while fabrications are intentional falsehoods
aimed at misleading. “Whereas a keying intendedly leads all participants to have the same
view of what is going on, a fabrication requires differences” (Goffman,
1986, p. 84). Understanding designs and fabrications is crucial as they show how
social interactions are managed and controlled, whether through honest impression management
or deceit.
Goffman also discusses “structural issues in fabrications,” referring to
their transformations. “Just as keyings can be transformed into fabrications, so
fabrications can be transformed into other fabrications; in brief, containment can be
recontained” (Goffman, 1986, p. 162). One example is the Big Cons, where
“the dupes are innocents misled by avarice into aiding a financial conspiracy, while the
operators are criminals using elaborate props” (Goffman, 1986, p. 165).
“Out of frame activities” are actions that don’t align with the primary
frame, disrupting or challenging the situation’s definition. These activities reveal the
fluidity of social interactions and how individuals manage their performances. They also
highlight power dynamics, social norms, and the processes maintaining or challenging social
order (Goffman, 1986, pp. 202 ff.).
Still, there is so-called “anchoring” for all frames, whether it is
natural or social framework. Since, according to Goffman, frameworks are “not just a matter
of mind but correspond in some sense to the way in which an aspect of the activity itself is
organized”. Hence, cognition does not create or generate certain organizational premises but
it somehow arrives at such organizational premises. Goffman discusses that “anchoring”
refers to the processes and elements that stabilize and define the frame within which
activities occur, ensuring that participants understand and interpret their actions in a
consistent and socially coherent manner (Goffman, 1986, p. 247).
Though Goffman’s conceptualization of individuals within frame analysis is
seeing them either acting accurately according to frames or deceived and deluded, the
individual also takes action, both verbal and physical based on the perceptions s/he has
within framing s/he possesses. Since, frame organizes not only the meaning but also
involvement. “During any spate of activity, participants will ordinarily not only obtain a
sense of what is going on but will also (in some degree) become spontaneously engrossed,
caught up, enthralled”. Given the fact that “involvement is an interlocking obligation”, a
participant’s fail to maintain prescribed attention would trigger other participants’
awakenings (Goffman, 1986, pp. 345-346). In case of unmanageable occurs
in which the frame cannot be applied. Goffman defines such cases as “breaking frames”. When
a frame is broken, the shared understanding of the situation collapses, leading to
confusion, disorientation, and often the need for redefinition of the situation. He asserts
that although all social activities seem vulnerable to flooding outs and breakings, scripted
dramatic presentations as will be seen in the case of debt collection and credit
restructuring process are especially vulnerable owing to the complex frame structure they
have (Goffman, 1986, p. 369). However, this complex structure is not the
only reason behind the breaking frames. Individual might also break from the appropriate
behavior a primary framework suggests because of becoming interactionally disorganized.
Goffman sees such incidences when “a very hungry person suddenly exhibits naked
voraciousness in his approach to food, when stimulated sexual interest turns to rape, when
uneasy walking to an exit turns to a panicky race, when polite exchange of insults turns to
all-out verbal attack, … a downkeying in which the appearance of reserve discredited” (Goffman, 1986, p. 375).
“The manufacture of negative experience” refers to the ways in which
negative experiences are deliberately created, structured, and presented within social
interactions. This concept explores how certain interactions or situations are constructed
to produce discomfort, embarrassment, or other negative feelings for the individuals
involved. When an individual finds himself in a framed situation s/he tends to maintain some
restraint on his/her direct, impulsive participation. Apart from affective reserve, there
most probably will be a degree of cognitive reserve, a hint of uncertainty about the
framework and changes, along with a slight willingness to consider the need to reframe the
situation. Expecting to assume a role within a well-defined frame, s/he discovers that no
specific framework is immediately suitable, or the framework s/he believed to be relevant no
longer seems applicable, or s/he is unable to conform to the framework that does appear to
fit. S/He loses control over creating an effective response and struggles. So what s/he is
experiencing turns out a “negative experience” in the sense that its essential nature is
defined by what it is not (Goffman, 1986, pp. 378-379).
Goffman gives the example of stressful persuasion situations like police
interrogation, which also resembles somehow a debt collection and/or credit restructuring
process. Such types of negative experiences rely upon causing a participant to flood out.
The debtor in our case here will be lose the control of the situation and become a subject
of self-exposure and new relationship formations (Goffman, 1986, p. 385).
Although the manufacture of negative experience often involves power dynamics, where those
in positions of authority or dominance create situations that result in negative experiences
for those with less power, for Goffman, there is also a room for what he calls “social
sabotage”. Here, the frame breaks come from below. The discomforting and discrediting of an
adversary by breaking the rules of the interaction frame a situationally (or maybe
structurally as in the case of debtor) subordinate participant is supposed to maintain.
These actions reveal more about the vulnerabilities of framed experiences than the
organizational role of frame breaks (Goffman, 1986, pp. 425-426).
“The vulnerabilities of experience” pertains to the inherent uncertainties
and risks involved in frameworks. Since any sequence of (inter)actions is tied to the frame
of the experience and that this framing process has inherent weaknesses, the vulnerabilities
of framing will also render the participant individual’s understanding of what is it that is
going on is vulnerable as well. In many instances, only a minor shift in focus is needed to
bring the vulnerabilities of framing into question. Here, instead of questioning “when to
doubt a claimant and what can be done about checking up on claims”, Goffman
examines the way we perceive the coherence of our world (Goffman, 1986, pp.
439-440). It is evident that a particular action or appearance can carry different
interpretations on different occasions. For instance, someone cleaning off his/her dinner
plate could be perceived as famished, courteous, indulgent, or thrifty, depending on the
context. In a debt restructuring process a hand to save debtor from his/her burden can also
be interpreted as a hand to strangle his/her neck to collect the maximum amount of money.
It is clear that everyone encounters ambiguities about frames and doubts
about their role within those frames from time to time. Additionally, individuals can
anticipate misframing events on occasion. Similarly, they may fall prey to deception and
illusion, only later realizing these distortions of reality have occurred. As Goffman puts
it:
…in everyday life people engage in a multitude of minor
doctorings of the world -as when, for example, they arrange to turn up ‘accidentally’ at
a place where they are likely to run into someone they secretly want to see; or provide
a tactful lead into a question they want someone else to raise; or ask a question as
part of a ‘natural’ series of questions so that it will appear that their interest is in
the series, and hence general, and that they have no special and thus revealing interest
in the particular question motivating the whole display (Goffman,
1986, pp. 444-445).
Such a minor doctoring can also be found in the credit restructuring
process as the debt collectors’ training workshops reveal.
Overall, Frame Analysis provides a rich theoretical framework for
understanding how individuals construct meaning, interpret social interactions, and navigate
complex social environments through the use of cognitive frames, keyings, designs,
fabrications and so on. Goffman’s insights provide a better understanding of “what is it
that’s going on here” (1986, p. 8) in credit restructuring process by linking a
micro/interactional aspects of the situation to macro/structural aspects of broader
socio-political context.
Methodology and data collection
This paper relies on a qualitative nethnographic approach consisting of a
participant observation at an online debt collector training workshop and a discourse
analysis of 183 debtor complaints on Şikayetvar. Challenges in access limited direct
engagement with AMC employees, making netnographic observation and consumer discourse
analysis the most viable methods. As prior studies (Deville, 2015b; Rao & McDonald, 2023) have demonstrated, analyzing debtor complaints
provides valuable insight into financial governance and consumer resistance.
As I was digging for the data of AMCs and NPL market in Türkiye, I saw an
advertisement promoting the hints for an effective debt collection and persuasion process. I
signed up for the event, paid the registration fee and got ready before the screen when the
time came for the workshop sessions. The workshop was kind of a “101” to the debt collection
craft as the trainer put it and seemed to me a demo for further training sessions that are
supposed to attract the professionals. The workshop I attended online involved three
sessions and took one day. The workshop was closed to the questions and any kind of
interactions during the sessions. Yet, at the end the trainer welcomed questions regarding
the hints he provided. My intention in attending this workshop was to get a sense of
understanding of how debt collectors see their profession, how they define the process, and
how they describe the debtors. Indeed, the workshop provided me an ideal typical picture of
debt collection and credit restructuring process from the point of view of the collectors.
On the other hand, this paper also relies on a brief survey and discourse
analysis I conducted on the customer complaints posted to a customer complaint platform,
Şikayetvar starting from 5th of April 2022 to 25th of December
2023. Although lacking an official sanction on the service providers, Şikayetvar
plays a significant role in customer protection, as the companies tend to reach out the
customers complaining about their service immediately. Between mentioned dates there are
around 7,000 complaints regarding AMCs. I employed a random selection method based on the
dates of complaints and drew 183 complaints posted by different individual debtors. Then, I
conducted a discourse analysis of those 183 complaints and let the relevant themes emerged
out of them. To ensure methodological rigor, I employed a systematic coding process. Data
were analyzed using MaxQDA software to facilitate thematic categorization. 183 randomly
selected complaint entries uploaded to the software to be able to derive the initial
codings. “Harsh interest rates”, “misconduct and violation of basic courtesy rules”,
“violation of GDPR”, “harassment and psychological pressure”, and “retardation in reporting
the debt clearance to the Credit Record Bureau” were the initial codings emerged out of the
discourse analysis of 183 complaints. Based on these initial codings, themes emerged
inductively, focusing on communication tactics, debtor resistance, and legal/ethical
concerns. As the retardation in reporting the debt clearance to the Credit Recording Bureau
implies a non-debtor participant I decided to exclude it. After clustering the remaining
complaints regarding the themes they were pointing at, I selected few most representing
complaints to conduct further frame analysis here in this paper.
Findings and analysis
My goal in attending online debt collector training workshop was to gain
insight into how debt collectors perceive their profession, how they conceptualize the
process, and how they characterize debtors. The workshop offered me a comprehensive
understanding of debt collection and credit restructuring processes from the collectors’
perspective. This idealized approach, which places a strong emphasis on basic courtesy
rules, holds the promise of significantly increasing turnover ratios for AMCs. Moreover,
this idealized debt collection practice aligns with the missions and objectives outlined by
the two largest AMCs mentioned earlier. Phrases such as “unchaining the customer”,
“financial freedom”, “reintegrating debtors into the economy”, “setting customers free”, and
“achieving peace” all underscore the empathy highlighted in the workshop. However, AMCs face
numerous complaints, particularly regarding their use of tactics such as contacting debtors’
relatives, threatening imprisonment, closely monitoring borrowers, and causing distress with
excessively high interest rates. A Goffmanesque frame analysis of all these data derived
from the digital field suggests that interactions within the debt collection process
continue to carry elements of stigma, marginalization, harassment, violation of GDPR, and
lack of basic courtesy. Therefore, it can be said that AMCs are restructuring both
the formal and the informal default patterns of personal debt relations while restructuring
the non-performing loans.
The craft of debt collection: a nethnographic research on debt
collector training workshop
Thanks to cookies and pixels that revealed my scholarly interest to
the relevant companies, I happened to see a debt collector training workshop
advertisement while randomly surfing the internet. I checked the details and decided to
attend the online workshop. As the time for online meeting arrived, I signed in to my
zoom account and went to the meeting link that was sent the day before. After a few
minutes of waiting for the host to start the meeting, a middle-aged man appeared on the
screen and greeted all the attendees with a more or less studious -and maybe an
unnatural- polite way of courtesy. The rest of the first session was a good application
of etiquette manuals to the debt collection process.
In the first session, the trainer mentioned that the professionalism
of an institution is demonstrated by the speech of a collector makes. Hence, it is very
important to start talking with a smiling tone when a collector calls the borrower. He
said using words such as “hello” and “sir” in the opening is among the forbidden words.
A collector should also pay attention to the tone of voice that should not be
threatening or weary: “Good afternoon, I’m ***** from ***** AMC. How are you?” The
second important issue, according to the trainer, was to learn the other party’s name
and address him/her by his/her name. After learning the name, a collector needs to avoid
addressing him/her as “sir” or “ma’am”. If the number the collector is calling is a
mobile phone, after introducing himself/herself, the collector should definitely ask if
the other party is available to talk. If the collector catches him/her in an
inappropriate place or time, the time spent on collection would be wasted. Thus, the
collector should immediately ask the person on the line, “what should be the right time
to call you?” In some cases, borrowers would use this justification to get around the
collector. But the collector has to believe it. If the borrower doesn’t pick up when
given the time to call back, then the collector may consider calling him/her from
another number. The third courtesy rule the trainer insisted on was correct
pronunciation of the names.
The second session focused more on the collection process yet still
had the taste of etiquette manuals’ courtesy rules. The trainer drew attention to
effective listening. Since listening effectively when speaking on the phone means that
you listen well and understand what the other party is saying:
Collector: You are in a meeting right now. Did I get right?
C: When did you say you would be available?
C: Do you want me to call you from this number at this time tomorrow?
“The right answers are always given to the right questions”, the
trainer explained. That’s why a collector needs to prepare his/her questions in advance
to ask questions. It is also very important to take notes in the phone conversation and
to inform the other party that the collector is taking notes. For example, to a person
who says “call me at this number”, saying “Can you repeat the number so I write it
down?” would be appropriate both to give correct feedback and to indicate that the
collector cares about what the other party says. When the conversation is over, the
collector should thank him/her for his/her time or close it by apologizing for calling
at an inappropriate time/place: “Sorry to interrupt your meeting”. For the trainer,
turning off the phone is also very important. It allows the collector to call that
person again even if the collector does not reach his/her goal. “Even in the most
controversial conversations, it is necessary to keep the doors open to meeting again at
the end of the conversation”, the trainer concluded. For this, the collector needs to
continue to show courtesy and respect even if the other party uses rude and unkind
words.
The third, and the final session of the workshop was dedicated to the
so-called craft of debt collection. A collector, according to the trainer, should become
an interrogator. However, one should not think of police interrogation but this is more
like a doctor’s interrogation to discover and diagnose the malaise. What, where, how,
why, who and when? The most accurate conclusion is reached by answering these questions.
Why didn’t the customer pay? No money? Does s/he pay what he has to others? Is s/he
delaying payments to meet his/her cash needs? Instead of asking “Why didn’t you pay?”
the collector should say “There must have been a very important reason why you did not
pay. I hope you want to get rid of this debt as soon as possible.” Instead of “Why
didn’t you read the contract details?” the collector should say “I think you missed the
contract details. If you want, let me read you the relevant article of the contract you
signed.” Or instead of directing a question such as “why are you talking angrily?” the
collector should tell “This unpaid debt must be bothering you a lot, right?” According
to the trainer, questions should be open-ended: “When can you pay?” “How much can you
pay monthly?” “How much can you pay in advance?”
It is very important to listen to borrower if there is a problem about
why s/he cannot usually pay or pay in advance. If there is no objection to the debts,
the debt amount and the addressee, then the problem is that the income is insufficient.
The purpose of the collector is making borrower to pay at least a reasonable amount of
existing debt. The collector, who reads the speech without a soul, for the trainer,
cannot perform his/her persuasiveness well and the collections would decrease. The
collector thinks that s/he hung up the phone by reading his/her speech s/he is doing
his/her job, but the result may not end up with the collection. The trainer emphasized
once again that being polite is a prerequisite for the craft of debt collection. Since
offensive conversations and arguments activate the automatic defense mechanism. Even
those who have the intention to pay may start fighting the collector for not paying a
single penny. According to the workshop trainer, an empathy following the basic courtesy
would bring about the solution as well:
“I understand you, very well. But you do understand
that we want to help you solve this problem. You and we can both make a little more
sacrifice in this period to find a solution to this problem, right?”
Thus ended a short introductory workshop to the craft of debt
collection. This idealized practice that is insisting very much on the basic courtesy
rules promises a significant increase turnover ratio for AMCs. This idealized debt
collection craft also complies with the missions and aims defined by the biggest two
AMCs cited above. Unchaining the customer, financial freedom, reintegrating as much as
debtors to the economy, setting the customers free, achieving peace are all phrases
referring to the empathy underlined in the workshop. However, neither self-definitions
posted on the AMCs’ websites, nor the idealized debt collection courtesy, reverberate on
the complex relationality of the real life.
“Switching off the air conditioner”: a discourse analysis of the
complaints on AMCs
AMCs are the subject of many complaints, especially on the grounds
that they use methods such as calling the relatives of the debtors, intimidating prison
sentences, following the borrowers like a sleuth, and annoyed the debtors with
astronomical interest rates. The films
5
that are based on the stories of the AMCs also depict these negative aspects of the
debt collection process. One of the most significant examples involves switching off the
air conditioner in the summer when a defaulted borrower comes for negotiating on the
terms of credit restructuring. Thus, the debt collectors try to employ an emotional
pressure on the borrower by putting him/her in an unbearable situation, thus make
him/her end the negotiation and agree with the harsher terms. This cinematographic
mise-an-scene may sound too exaggerated. An analysis of the complaints of AMC
customers posted to Şikayetvar, a customer complaint platform in Türkiye gives
some idea of its veracity. Out of those ongoing debates about the AMCs’ misconducts with
their customers, political figures also targeted AMCs. For instance, the opposition
front’s presidency candidate, and the former chariman of Republican People’s Party (RPP)
Kemal Kılıçdaroğlu addressed public on this issue and told that:
“Banks are selling the defaulted debts of citizens
to AMCs. Because of these debts, lawyers will call you. They will threaten you.
These are usurers. These are the mafia. These are vipers and centipedes. These are
the ones who have their eyes on your bread. Don’t pay, I’ll talk to them after the
elections.”
Another political figure, an Istanbul MP again from the RPP, Gürsel
Tekin criticized AMCs for using “unimagined methods to collect those debts by harassing
the debtors and boring the pants off those debtors.” According to Tekin AMCs cause
incurable wounds (Gazete Kritik, 25 February 2022).
Between April 5, 2022, and December 25, 2023, approximately 7,000
complaints concerning AMCs were posted to Şikayetvar (www.sikayetvar.com), a
customer complaint platform in Türkiye. Using a random selection method based on
complaint dates, I analyzed 183 complaints submitted by individual debtors. One of the
most frequent complaints about AMCs involves their harsh interest rates on the credits.
Muhittin, a defaulted borrower complains about that and tells **** Varlık
6
initially asked him to pay TRY 5,800 and now they were asking him to pay TRY 9,000
although he told them he was ready to pay TRY 7,000. Now he says he doesn’t want to pay
any amount any more. Similar case also added by Halil, who is urging fellow customers
not to call **** Varlık to pay their debts. Halil says, “If you call them, they want
three times what you owe.” He says he feels regretful. The final example among the
varieties of similar complaints put by Mehmet. He complains:
“**** Varlık took over the debt for my principal
debt of TRY 15,000. They demand TRY 37,000 from me. They state that the
representative, who previously made an offer of TRY 22,000 when an agreement was
reached, left their company and now the closing amount of the current debt is TRY
37,000.”
The second subject of the majority of the complaints is misconduct and
violation of the basic courtesy rules that are idealized in the debt collection training
workshops. Mesut, İsmail, Muhammet and Zeynep complain about AMC debt collectors hanging
up on them, mocking at them, and talking to them in a threatening tone. Gülçin’s
complain summarizes such misconduct and emotional pressure well:
“Although Denizbank sold my debt without any written
notice, **** Varlık asks me to pay TRY 658. A guy there is mocking at me and hangs
up on me. I am pregnant and victimized. I wanna solve the problem by paying the
principal.”
Violation of basic courtesy rules and ruining the idealized image of
the craft of debt collection is also widely expressed in complaints on the platform.
Gizem complains about an AMC is calling her again and again and communicating with her
in a “threatening and disturbing tone”. Av. complains a collector from an AMC is
“insulting the customers with her rude manners”. An interesting complaint put by Aytekin
reveals that:
“Instead of the initial TRY 35,000 credit I am ready
to pay TRY 80,000. Though the man from **** Varlık told me with bunch of word plays
that that was the amount for last month. Also he uses such phrases like ‘that is
none of your business’ etc.”
The third most widely expressed and significant subject of complaints
involves AMCs’ violation of General Data Protection Regulation (GDPR). These complaints
are also got to court and widely discussed on the newspapers. News on Yenişafak
by Ayşe Mine Alioğlu narrates one of the cases and tells AMCs which took over the debts
of telecommunication companies, began to harass family members of the debtors with SMS
and calls when they could not collect. Although the penalty for these searches, which
are against the data protection regulation within the scope of GDPR, is TRY 50,000,
complaint platforms and law offices are flooded with aggrieved citizens:
“When one of the victims, A.K., did not pay his TRY
800 fee to a GSM company, he started receiving SMS from the GSM company. After a
certain period of time, GSM company transferred A.K’s debt to an AMC. This time,
endless calls and SMS started to be sent. After A.K. blocked the company’s number,
his wife, father and brother were informed via SMS that the debtor’s debt to the GSM
company would expire and enforcement proceedings would begin if it were not paid”
(Alioğlu, 2022).
A complaint put by Peri is another striking example
of the violation of GDPR. She says **** Varlık is calling her on her personal mobile
number for her mother’s debt. When she warned them that this was illegal they told
her that that was the contact number for her mother. She repeats her warning on the
complaint platform: “Delete my number or I will sue you on violating the GDPR.”
The last but not the least widely expressed subject of the complaints
put forth by AMC customers is harassment and psychological pressure. Erdal says he has
no job and he is unemployed. Even after he told the collector from AMC bothering him
with sometimes four calls in a single day, the collector told him that once he pays the
debt, they would stop calling. Ali points at a similar harassment, disrespect, and
rudeness. He says the collector told him that if they don’t put pressure on him, how
would they make him pay the debt. Hakan’s complaints summarizes the level of harassment
by AMCs:
“**** Varlık bored the pants off me. They call me
everyday. Though I told them I cannot pay at the moment because of financial
difficulties I am facing now. They keep calling and harassing me. I even think about
committing suicide.”
All in all, the interactions within the debt collection process still
have the mixed taste of stigmatization, marginalization, harassment, violation of GDPR
and basic courtesy rules, and so on.
“What is it that’s going on here?”: frame analysis of credit
restructuring
The primary frame for borrowers like Muhittin, Halil, and Mehmet
revolves around their financial obligations and the negotiations with AMCs. They
perceive the situation through the lens of debt repayment and fairness in financial
transactions. Halil’s warning to other borrowers not to engage with **** Varlık due to
their perceived demands (“three times what you owe”) breaks the expected frame of
reasonable debt negotiation. This violation of trust leads to regret and negative
perceptions of the debt collection process. Mehmet’s case exemplifies the negative
experience where **** Varlık’s changing terms (from TRY 22,000 to TRY 37,000) after a
verbal agreement illustrates a breach of trust and fairness. Such actions by the AMC can
disrupt the established frame of negotiation and fairness.
The primary frame for individuals like Mesut, İsmail, Muhammet,
Zeynep, and Gülçin centers on their interactions with debt collectors from AMCs. They
expect professionalism, respect, and adherence to basic courtesy norms during debt
collection processes. Goffman’s concept of designs and fabrications can be applied here.
Debt collectors mocking or using a threatening tone constitute fabrications where the
expected social norms of respectful communication are violated intentionally or
unintentionally. Such behaviors create negative impressions and undermine trust in the
debt collection process. Gülçin’s complaint about being mocked and hung up on breaks the
expected frame of professional and respectful communication. This breach can lead to
emotional pressure and distress, especially considering her vulnerable state as a
pregnant woman. Goffman’s notion of negative experiences caused by frame breaks is
evident here. Gülçin’s feeling of victimization due to the debt collector’s behavior
highlights how such interactions can manufacture negative emotional experiences,
influencing her perception of the debt collection process. In conclusion, these
complaints underscore how Goffman’s frame analysis can illuminate the dynamics of debt
collection interactions. Misconduct, such as mocking, hanging up on debtors, or using a
threatening tone, violates expected social norms and can lead to negative emotional
experiences and perceptions. However, Gülçin’s complaint may be interpreted as a
fabrication in which she employs a role where she is a victim of mocking and misconduct
as a pregnant woman and fabricate an image of a brutal AMC. Since such image
fabrications are the ones almost all companies avoid and seek for a way to collaborate
and settle the dispute with the customers.
Complaints like Av.’s about a collector insulting customers underscore
the importance of anchoring interactions in social norms that uphold dignity and
fairness. Aytekin’s complaint about a debt collector using phrases like “that is none of
your business” breaks the frame of expected professional and courteous behavior. Such
breaches can create confusion and frustration for the debtor, undermining trust in the
debt collection process. Goffman argues that such deviations can disrupt social
interactions and lead to negative perceptions and reactions from debtors. Goffman’s
concept of negative experiences resulting from frame breaks is relevant here. Aytekin
feeling misled or insulted by the debt collector’s behavior highlights how violations of
courtesy norms can manufacture negative emotional responses and shape perceptions of
debt collection practices.
The complaint regarding AMCs’ violation of the General Data Protection
Regulation (GDPR), describes how AMCs, upon failing to collect debts directly from
debtors, resorted to contacting their family members (wife, father, brother) via SMS
after the debtor blocked their number. This action breaks the frame of lawful debt
collection practices and violates GDPR by disclosing personal information to
unauthorized third parties. For example, Peri asserts that **** Varlık is contacting her
on her personal mobile number regarding her mother’s debt. This action breaks the frame
of lawful debt collection as it involves using personal data (Peri’s mobile number) for
a purpose (collecting her mother’s debt) without explicit consent or authorization.
According to Goffman, such breaches of privacy can manufacture negative experiences for
debtors and their families. The intrusion into personal lives through unsolicited
messages and calls creates emotional distress and undermines trust in the debt
collection process. The SMS notifications to family members can be seen as fabrications
where the debt collector manipulates the frame by extending the reach of debt collection
efforts beyond the debtor to family members, using their personal information without
consent to trigger the emotional pressures. However, Goffman’s concept of social
sabotage applies here as well. By posting such a complaint on AMCs’ violation of GDPR
debtors might trigger a public shame for the AMC and force them to step back. For
example, Peri’s warning about potential legal action may indicate the emotional distress
and frustration she may be experiencing due to the unauthorized use of her personal
information.
According to Goffman, psychological pressure occurs when debt
collectors exceed the boundaries of professional communication. This includes persistent
calling, insensitive remarks, and threats that cause emotional distress to debtors. In
debt collection, the primary frame revolves around the lawful recovery of debts owed.
Collectors are expected to communicate with debtors professionally and respectfully,
adhering to ethical guidelines and legal requirements. Debtors like Erdal, Ali, and
Hakan describe experiences where AMC collectors create negative emotional states through
harassment. Erdal’s case of receiving multiple calls despite his unemployment status,
Ali’s encounter with pressure tactics, and Hakan’s extreme emotional distress leading to
thoughts of suicide illustrate the impact of such behaviors. Goffman’s notion of frame
breaking is evident when debt collectors push debtors beyond their coping mechanisms, as
seen in Hakan’s case where he contemplates suicide due to the overwhelming pressure.
Such extreme reactions indicate a complete breakdown of the expected frame of debt
collection. Harassment and psychological pressure violate ethical standards of conduct
in debt collection. Collectors have a duty to treat debtors with dignity and compassion,
regardless of their financial situation. However, Hakan’s case might be a fabrication
where he complains about the harassment by AMC to force credit restructuring process
settle in dearer terms for him.
