There is nothing quite like financial vulnerability to eliminate your right to speak. Being poor is one thing, but being indebted adds an entirely different layer of oppression. It never ceases to amaze me how many seem able to advise, without ever experiencing the reality of those they seek to help - people with money telling people without money how to manage it.
Never pay for debt help, PPI or payday loans! Yet thousands of us carry on doing just that. Only recently, a survey found 93% of customers think payday lenders treat them with respect. So loathsome was this thought that Jill Insley of The Guardian sought to undermine the research without the slightest regard for the body of evidence corroborating it from Wonga.
Now, you might say that Wonga is an unreliable source (we’ve checked their statistics, Jill, they’re solid), but could you run a successful business if your entire truck was a con? When you hate the idea of people making money from disadvantage, you have to ask yourself how it happens, if you are to stop exploitation. It’s a dirty job finding out, so I make no apology.
The psychology of “don’t” is powerful. It brings mobile phones into inappropriate social gatherings, cannabis to the school gates and a host of questionable products and services to the consumer who perceives no choice. Meeting Mike Shamash of The People’s Power last week to consider households who never switch energy supply was a real eye-opener.
Even the considerably flawed Money Advice Service has invested some funds to explore why people don’t necessarily do what is best for them. We procrastinate over savings, borrow more when we are in debt, and pay over the odds for goods that we know are opportunistic. I often wonder how many people have done a deal they’d rather forget.
It’s uncomfortable when our economy generates solutions that challenge our comfort zone. Payday lenders say they are transparent and many of their customers seem to agree. It’s all too easy to chastise from the comfort of column or constituency, but when bankruptcy costs some £700 to get by on a mere £20 a month disposable income, is it any wonder we look for alternatives?
The growing market for recession-easers is not as clear as it seems. When you unpick the incentives of loyalty, vouchers and discount codes there is little difference between the profit motive for a share of your belly and that with an interest in debt recovery. Never mind that some claims and debt management firms belong to individuals with social justice at their core. It’s in vogue to tar them all with the same brush.
Our collective failure to comprehend the affair with credit that defined the last decade has left us blind to the pensioner (with fixed income) sold PPI, bank charges slapped on a lone parent suffering unpaid child maintenance and the increasingly unaffordable costs of living. With an average household income of some £26,000, how else do we pay for car insurance, if not by credit agreement for instalments? Governments past and present are accountable for that.
What disgusts me most in all of the received wisdom is its composite failure to address the real scams, like registered debt charities without a consumer credit licence (not the well-known ones), or brokers quoting a representative APR, when they can guarantee no such thing. These under the radar cons are what cost people dear - deal with these, please, before you dismiss Wonga and co.
Those of you who know me well - and there are a few who have watched my journey from lone voice to founding a collective – will know that as much as I may dislike payday loans, paying for debt help or PPI claims, our Coop has confronted me with people, who use these services. Increasingly, not for-profit providers as well as firms ask us how to deliver help transparently, because we cannot afford such arrogance as to think all these people wrong.
Not one of the money-saving pundits predicted the credit crunch, so their authority in addressing the fallout is questionable. I founded Zero-credit to give consumers a say in financial services and every aspect of its vision aims to level each voice alongside yours. I don’t have the answers, but I’d like to think that co-operatively, we all do.
Businesses are professionals are asked to subscribe because a share in Zero-credit is only open to people with personal experience of borrowing.
We've been a tad busy of late... Among other things we've been working on a cracking event for National Student Money Week with James Jones of Experian, to invite a number of 6th form students to the Experian HQ on Wednesday 14th March to learn all about credit referencing. check out our event blog at http://www.nsmw-em.org.uk.
This is a fictional tale by Claire Walters (@WFCCUClaire) and does not necessarily represent the views of Waltham Forest Community Credit Union.
“I’m a bit short mate, can you lend us a tenner?”
“Course I can, as long as I can get it back by Friday, and you pay my train fare as well”
“How much is the train fare?”
“Oh not much, just over £3”
“OK, I guess, thanks, see you Friday”
......
“Have you got my thirteen quid?”
“I’m really sorry, I can only give you a fiver, and your train ticket obviously, but I had to put some money on the gas meter so I’ll have to catch you next week, is that ok?”
“Oh well, I suppose so, but I’ll need you to give me another £3 for my fare and buy me a sandwich for the inconvenience”
“All right, ok, sorry, what kind of sandwich?”
“Prawn and mayo, £3.75”
“OK, no problem”
......
“Hi, have you got my £8 and the sandwich?”
“I feel a bit silly, but I ran out of time so I’ve only got £5 and haven’t had a chance to get the sandwich yet I’m afraid.”
“Oh man, I’m starving! And now I’ve got to buy my ticket too... Right, next week, I want the £3 you owe me, 2 lots of sandwiches, my ticket home and a pint to say sorry.”
“Ok, calm down - sure, whatever you want , sorry again.”
....
“Now then – where’s my dosh and stuff?”
“Here it is, all sorted, the £3 I owe you, the sandwiches, today’s train ticket and a pint of Stella – are we straight? “
“Yes mate, that’s cool, but if you want to wait a week, I don’t mind, as long as you buy me a sandwich and a pint again next time...”
“Thanks for the offer, but I’m not being funny – I only borrowed a tenner and it’s already cost me £30 to pay you back because of all these extras”
“Ah well, who else would have lent you the tenner in the first place though... sure you don’t want to wait another week?”
NB: such people are not your friends, steer clear...
1. A brand may die, but it cannot live
2. It cannot squeal with joy
3. Nor writhe in agony
4. A brand can be limp, but it can never run with the wind in its hair
5. A brand cannot smile
6. Nor can it laugh
7. And as for the jokes that it tells? A brand can never stand-up
8. A brand cannot make your bed rock
9. Nor can it get so drunk that it droops
10. A brand can have children, but never sit them on its knee
11. A brand cannot caress you
12. Nor can it fart
13. Burp
14. And snore
15. Though it can keep you awake at night, but only unintentionally
16. A brand cannot do the timewarp
17. It cannot hand-jive
18. Head-bang
19. Or do the twist
20. A brand cannot command your loyalty when it is not loyal to you
Soon to be 18, my son is full of it! He wants money for this, money for that, and fancies himself as a bit of a wheeler-dealer. Like every parent, I want to encourage his independence so I try to guide him through the process of making informed choices when buying or selling. Around 18 months ago, he had a real stroke of luck, picking up a gold bracelet in the US for $40. When he brought it home, I took it straight to the jewellers and had a valuation of £350. Nice one, son (he is nice, my one and only son, and his luck was totally legit)!
My son hung on to the bracelet, and because it did not fit, I suggested that with gold prices rising he might want to keep his investment in an asset that was increasing in value. Last weekend, the opportunity to experience Cash for Gold could no longer wait...
After researching gold prices online, we went to four establishments to consider a sale - one jeweller, one traditional pawnbroker and two cash converting types. My son wisely suggested avoiding a table-top booth in the shopping arcade, where everyone can see your transaction. The jeweller looked at the bracelet through an eye glass, weighed it and came back with an offer of £345 – less than I had been told it was worth 18 months ago and less than our digital valuation – shame on you, who abuse your profession... The pawnbroker advised that with so much fake gold on the market, the bracelet would need to be tested, but only if we agreed that a sale could go ahead first. Before shopping around for more information, the bracelet was weighed and a price of £415 suggested. Cash Converters refused to give a price without testing the bracelet and as this involved scraping and acid by someone who had to refer to several layers of management before confirming a recognisable hallmark, we walked out.
Cash Generators, where we had previously sold a long since abandoned student trumpet, weighed the bracelet, checked the internet and confirmed a price of £12 a gram for 14 carat gold - £288, no questions asked, though to be fair, the valuer is an ex-pupil of mine.
Within less than 500 yards of each other, four gold buyers had offered prices with a difference of £127 – around two weeks rent for a small council or housing association property and top dollar for a budding entrepreneur of 17.
Of key importance to anyone wishing to cash in their assets is knowing that these new style pawnbrokers cut at least 40% off the value of any item you trade. Fine, perhaps, if you’re selling items that a traditional pawnbroker will not buy, but not so fine for serious valuables.
What did we do? Well, despite my best efforts to trade at the start of a week rather than at the end of it, when that Friday feeling takes over, my son could resist the call of filthy lucre no longer. Who am I to criticise? The kid just made £390 profit - #duecredit, son!
Shared by Emma Bryn-Jones, Zero-credit founder and coop director.
Image: Idea go / FreeDigitalPhotos.net
Not the first time we've blogged this and it may not be the last... But, where could you bank?
Hmm.. not suprisingly, we like ethical banking from the Co-operative, but bo doubt you'll find more to choose from at http://moveyourmoney.org.uk/ which launches today!
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