Monday morning, the phone rings and an hour later I’m working at a bank. There’s a kind of Special Forces reservist feel to this lark sometimes: “Help! There’s something really menial that has to get done by close of business today! Who shall we call?”
So I’m currently working in the mail room at the offices of a high street bank. I had a vision of walking around a massive office with a trolly dispensing envelopes to all and sundry like Michael J Fox in The Secret of My Success, but this is the 21st century and email has kinda put paid to that sort of lark. The only stuff sent by post these days are legal documents and junk mail, a frightening amount of which was returned to sender, covered in pleading scrawls begging for it not to be sent again.
Here’s a thing. Say you’re in debt to a bank and you can’t pay them back. The bank brings in a debt collection agency to send you threatening letters and negotiate a repayment plan. Did you know that these “outside agencies” are actually part of the bank? They’ll use a different trading name and a PO Box address but it’s essentially just another department. Makes sense from a PR point of view but I wonder how many people realise these demanding missives are actually coming from the friendly bank that happily gave them the overdraft/loan in the beginning. Apparently debt collection and debt counseling is the largest growth area in the financial sector – I hope the 80′s Thatcherites are proud.
Part of my job was opening and sorting into piles letters sent to the PO Box and it was quite the most dispiriting start to the day I’ve ever had. Lots of cheques, most for sums under £5.00, and lots of letters, some angry, some begging, and some poignantly matter of fact. One that stuck in my mind read (paraphrase from memory) “I cannot pay £xx a month as I had a baby but he died. I will be working soon” scrawled in a gap on a “financial status” form. Every other envelope told another story of woe and there were hundreds of them.
Two things struck me about this. The first was the semi-literate, naive nature of the letters implying these are some of the least educated, least switched on members of society, often on income support or some other kind of benefit. It’s not hard to imagine then seeking the promised happiness of buying stuff on the never-never and are now reaping a misery that wasn’t mentioned outside the small print. The second was how much this process costs. As I said, most of the cheques sent in were for nominal amounts, quite frequently just £1.00 a month, as negotiated between the bank and a debt counselor (often the Citizens Advice Bureau). With all these people employed and all these bits of paper flying around I’d have to wonder how much money is left at the end of the day. Of course if the intended result is to punish then it’s succeeding.
I’ve seen a small glimpse of the underbelly of our consumer based society and it’s not nice.
Working in the sorting room of a bank nearly did for me. Good luck.
The 1980s Thatcherites would retort “Buyer Beware”!
After leaving Houston foir several months I was caught with two collection agency attempts to retrieve moneys that I had already paid or had been told I didn’t need to pay. Guess what? Once the amount is transfered to the collection agency there is no way you can argue that there was an error – perhaps another reason why the debt collection is transfered away from the original lender/provider. In one case I negotiated the sum (about $100) down to 40% of the principal. Why did I pay? Simply because not doing so would tarnish an otherwise exemplary credit rating. As I wrote out the check I felt positively cheated.
I have no answers, but am grateful that your current lifestyle makes me a liitle more aware of a different reality from the comfortable middle class lifestyle as seen on the surface here in Winchester.
I’ve given this some more thought and remembered that the scam used by collection agencies is a lot more common than the occasional example. I have mentioned my run in with Sprint PCS (cell phone) to several people and was surprised that this is a common happening when people try to close an account.
When I tried to contact Sprint after the debt was with collection I was told there was nothing they could do (several letters had sat waiting for me to return and they insisted that this was therefore my fault). However, when I had closed the account I was assured, verbally, that there would be no extra payments due. I asked if this should be put in writing and was told that it would not be necessary.
The overall problem is not only one for the “underclass”. Many people, some I know well, have been forced into credit card counseling and have even considered declaring personal bankruptcy. One example I am aware of owed $25,000 with 20% interest rates and earned around $50,000 a year. Again, the cynical would say “buyer beware” but the pressures of the consumer society are such that it is difficult for many to avoid running up large debt.
Education is certainly an issue here but there is also the question of consumer rights – when you owe you “never never” have the same rights as when you pay cash.
Don’t really know why I feel compelled to comment, but there’s something about the plight of people owing what is probably a large amount of money and only able to pay off a few quid a month that breaks my heart. I do think a lot of the blame goes to magazines like Heat that help create a celebrity wannabe mentality in readers. There was an interesting documentary on BBC 2 a couple of months ago called Spend It Like Beckham (I think) which talked a bit about this. A lot of people want to live the celebrity lifestyle and for many the ‘never never’ seems to be the only way to achieve it.
Now I don’t want to come across as a Mr Nasty, Mail reading Thatcherite, cos those that know me know I aint. Quite simply it is scary just how dependant some of the ‘poor’ have become, to the point where they have totally given up responsibility for anything and everything that (they consider) happens too them. My grandparents where poor but back then you just got on with your life and made your own lot better by hard work. Parts of our society have become socially excluded and totally dependant, somehow I don’t think debt councilling is the answer. This is my experience from working day in and day out with this part of society.
How much is a second class stamp in the UK? 20p, according to the Royal Mail website. If the agreement is to pay £1 a month, then the postage alone mean an additional hidden cost of 20%. For £5 a month, it’s still 4%. Add to that the cost of an envelope, etc.
But there is more. The cost of handling all those small payments has to be considerable, such that eventually there can be no point in bothering to make the collection.
Who wins? Well, the post office does. And the retailer that sold the goods in the first place. Except there will be no repeat business, assuming credit ratings stop further purchases.
Dave C’s point is well taken. But there was no such thing as instant gratification a generation or two ago. Most people simply waited until they could afford what they wanted. The along came “G Plan Furniture” and everything changed. Who’s to blame? Advertising seems to be the worst culprit in that they never educate if it means reducing the opportunity to sell. Hence the invention of “fine print”.