DOORSTEP LENDING – DOING WELL IN THE RECESSION
BBC Panorama’s UNDERCOVER: DEBT ON THE DOORSTEP (Monday Oct 1st) www.bbc.co.uk/programmes/b01n7m0q
This revealing and worrying documentary showed just how badly indebted the most ordinary people are in our own neighbourhoods – and not just the average household but also the poorest and most vulnerable. And today Credit Action reported that UK personal debt amounted to trillions of pounds. One has heard and seen the adverts for payday loans and maybe heard of the extortionate rates of interest that can apply to them (APRs well into the hundreds) but the programme showed an undercover reporter being trained by Provident Financial – a regulated lender and a major UK financial company – and followed some experienced agents doing their rounds. Elderly and isolated people were offered small loans at first, and then tempted with ever-larger sums which build and build until they are completely at the mercy of their creditor.
It hit home hard in terms of the life of dependence and the loss of freedom which results for a victim (there is no other word) and reminded me of the analysis made back in 1997 by the then Bishop of Worcester Peter Selby in the wake of the first massive credit explosion under Thatcher and Major. On the international level, with Greece and other southern Europeans nations suffering under its burden, international debt and its repercussions has come much nearer home than the so-called third world. Peter Selby’s book, which I happen to have picked up again recently, was called “Grace and Mortgage” (Darton Longman and Todd, 1997).
Selby was not the first to liken debt, and in particular the international debt trade, to slavery. In 1995 someone wrote a paper entitled “Debt: the most potent form of slavery” and called for its “abolition” because it resulted in much the same human cost as the slave trade. If debt – for a person or for a nation – is intractable and demeaning, a debilitating constraint on vulnerable people’s lives and a long-term burden, maybe it raises the same fundamental moral and economic issues that slavery did.
On an everyday political level, as the BBC programme suggested and as Gillian Guy of Citizens Advice emphasized, we need to be aware of the exploitation which is going on our streets, maybe even in our own families. Provident Financial is a professional regulated firm but it’s getting away with this every day. Not mentioned – this time – were ‘loan sharks’ (illegal money lenders, who are unregulated) and our own (regulated) banks and credit card lenders whose livelihood also depends on our credit and debt economy. What should we, in our compassionate lives, do about the victims, the perpetrators and the system?