Debt collection: erosion of the rule of law (3)
In free market economies, providers of products and services need customers.
In marketing, without customers, none of us are anything. Or, if that is too tortuous a double negative, without customers we are nothing.
Customers are the name of the game. They need to be identified, understood, targeted, persuaded, looked after, nurtured, retained.
Customer retention – sorry for the marketing jargon – differs from product to product, service to service. In simple terms, the more expensive the product, the less important the retention.
These are called high value, low volume products where even the wealthiest customers buy a limited number of yachts or swimming pools. You get my drift.
Other products, to maximise their profit potential, depend on customer retention.
These are the ‘repeat purchasers’ who buy the same product several times a week and sometimes every day. This is the low value, high volume end of the market. Food is the most obvious example. Daily bread.
Down here things get interesting – and, sometimes, nasty. Very nasty.
For there are ‘products’ which all of us buy every day without realising we are doing it, some of which we ‘buy’ before we turned the lights on in the morning or wash.
When we wash, we buy water. As it gushes out of the tap, so the meter ticks over and so do the ‘units’ for which we are charged by our water supplier.
If the water is hot, another meter, often tucked away in a cupboard or a basement, ticks over.
And, as these meters tick over, the money we owe our utility suppliers builds up until, sometime later, and as part of a faceless and, in this sense, timeless process we are sent a bill.
To some people, especially if they have children or are part of an ‘extended household’, the size of this bill comes as a shock. As they are spending money on their household utilities, and every time they wash their face, they have no idea how much money their household is spending.
The shock comes when the bill arrives.
And the reason it is a shock is because, when the bill arrives, when they have to pay, these customers, especially if they are old or sick, simply do not have the money.
Nor are they given room to query the amount they are being charged.
This is when things can get nasty.
For when a customer cannot pay his or her utility bill, the utility companies put the squeeze on. Threatening letters arrive in the post:
If you don’t pay, we are going to cut off your supply.
If you don’t pay, we will add your name to a ‘credit blacklist’. You may never get hot water again.
If you don’t pay, we will pass your name to a ‘debt collection’ agency.
If you don’t pay, we will apply for a ‘warrant of entry’. We will turn up at your front door, invade your house and take your belongings. ‘We will arrange for a locksmith to be present and, if necessary, a Police Officer, so that we can access the meter’.
If you don’t pay, we will take you to Court. You will pay the ‘extra costs’ of this legal action. ‘These extra costs can be substantial: up to £350 per meter’.
If you don’t pay, you will have a criminal record. You could go to prison.
Retention becomes detention.
And, during this process, do you know what these companies do? They distance themselves from their aggressive, bullying behaviour by sending you letters from ‘debt recovery companies’ who you have never heard of. Certainly, you have never agreed to a contract, a working relationship, with them.
Don’t you believe me?
There is a utility company called Utility Warehouse. They have a nom de plume, as it were, called ‘BCW Group’. In small letters at the bottom of the letter heading it says ‘BCW Group is a trading style of Utility Management Services (BCW Group) Limited.’
What is a ‘trading style’?
Over the course of a long and successful career, I have come to know the difference between a, ‘lmited’ company and an ‘unlimited’ company, a ‘public’ company and a ‘private’ company but I have never – ever – heard of a ‘trading style’.
You may not have heard of a ‘trading style’ either.
For you have a bigger problem.
You still cannot afford to pay your bill.
You are terrified things have got to so out of hand and the threats that have been made to you.
The bully boys have stepped in.
And things have become really scary.
So scared are you that you make one of the worst decisions of your life. You decide to go and borrow the money to get your utility company off your back.
To get rid of one debt, you commit yourself to a company who will provide you with another, even bigger debt.
These are the ‘payday lenders’.
What do they do?
They say: ‘Bills to pay? No money? No worries! We will lend you the money! No problem.’
Except, of course, there is a problem.
A massive problem.
The interest rates are so punitive, the ‘customers’ of these companies are never going to be able to repay their debts. They are in a nasty, vicious spiral to desperation and destitution and fear.
Because these ‘short-term credit’ providers are not actually providing anything are they? All they do is move their ‘customers’ from one level of debt to another.
Here is last week’s news about Wonga.
“Wonga could face a criminal investigation after it emerged that the payday loans giant had sent “thuggish” legal letters from fake law firms to threaten customers behind on repaying their loans, and charged them for the letters….. City of London Police have confirmed they are to look again at whether they think a criminal investigation into Britain’s biggest payday lender would be appropriate after the firm agreed to pay out £2.6 million in compensation to 45,000 customers who had received the bogus letters after being named and shamed by the Financial Conduct Authority (FCA) watchdog.”
Let me tell you, dear Republican, this is the merest tip of a very large iceberg.
I am deeply suspicious of the ‘reviews’ and ‘public enquiries’ and kangaroo courts called ‘parliamentary select committees’ that have crept into our society, but I do believe that the whole subject of debt collection and legalised gangsterism needs to be properly examined and redesigned in a more humane way.
I would go so far to say that, with the 800th Anniversary of the signing of the Magna Carta coming up next year, never has the ‘rule of law’ been so threatened as it is today by these disgraceful debt collectors.
The Magna Carta decreed that the rule of law was all powerful. It superceded the monarchy, the barons, the landowners, everyone.
Until now, in 21st Century Britain, where debt collectors, like celebrities, think they can operate above the law.
Where is the justice in this?