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From the inside out – CAP and the credit industry

calendar07 November 2013

Dawn Stobart's avatar Dawn Stobart

With the government cracking down on the likes of Wonga, QuickQuid and various other payday lenders who have been defending their lending practices in Parliament, CAP is also working to tackle the issue on another front. By working with these companies, CAP is a voice for the vulnerable, influencing policy from the inside.

My team, the Creditor Liaison Unit, is in the business of ‘speaking up for those who can’t speak for themselves’. We work with over one thousand creditors, from high street banks to payday lender, to get the best results for our clients; to get them out of debt as quickly as possible and to protect them from the storm of collection activity until they get there.

My particular role involves liaising with the movers and shakers of the credit industry to impress upon them that the clients they are dealing with are not just figures and boxes to tick, but real people with real lives – and real problems. We challenge existing procedures and highlight the need to change their processes.

In fact, in recent weeks, CAP has been approached by five credit companies seeking a personal consultation about their vulnerable clients, asking how they can improve their policies and implement a better system for dealing with particularly desperate clients compassionately. It’s a domino effect and CAP is pushing the boundaries in order to see change for the people who need it – one step, and credit company, at a time.

This month, three companies have offered to provide Christmas hampers to local CAP Debt Centres for clients living in poverty, and one has offered to provide food and clothing for clients in their local area. Two national creditors, and a third pending, are actively getting involved in CAP Job Clubs and the important work that is being pioneered by our team. This reflects their growing compassion and awareness of the value of offering practical and emotional support to clients through the trauma of debt repayment.

CAP has an integral role in shaping the credit industry and affecting change on a daily and weekly basis. We communicate to credit companies that what they regularly read as ‘won’t pay’ is often simply, ‘can’t pay’. We stand in the gap between companies and our clients and make sure that the voice of the voiceless and oppressed is heard - and it is through this that we are changing the policy of these companies from the inside out.

Payday loans – a response

calendar08 August 2013

Matt Barlow's avatar Matt Barlow

On 25 July, our PR switchboard hit the roof as the Archbishop of Canterbury went public with his desire to 'compete' payday lenders out of business. The UK wanted to know what we thought, no doubt to get both an opinion and probably looking for a dissenting voice. They didn't get any dissension from us – we are big fans of Justin Welby, who is a servant-hearted, Christ-centred, man of God. I believe he will be great for the Anglican church (and as the denomination with the highest number of CAP Debt Centres, we are interested!).

At CAP, we have seen the rise of payday lenders over the last few years, having to adapt some of our policies to handle this new element of the industry. As well as doing this, we have done what we always do: engage with these new companies, plead the case of the debtor and use our relationship to positively influence their policies to benefit vulnerable clients. While we do all of this with the utmost of respect, we have to acknowledge that this form of credit causes greater consternation than pretty much anything we've ever seen, excepting of course illegal loan sharks. It is simply wrong that someone should get approved for a loan so quickly, with so little thought being applied as to whether they can afford to pay it back. 

As a result of the credit crunch, the ease with which one can get credit has changed dramatically. It is simply much harder to get credit nowadays. You have to do so much more to prove you can afford it and that you are a 'good' risk, and that is a really good thing! However, as the mainstream lenders have re-introduced some common sense to their lending practices, the payday lenders have stepped into the gap. Taking the opportunity of little competition, they are charging huge interest rates. The other day, I read a yet another story of a lady driven to attempt suicide. Right at the heart of her story was the desperation of having to resort to getting payday loans to feed herself and the terror of having to handle these companies as they chased their debts. Thankfully, CAP now stands in the gap and most of the payday lenders 'play ball' and cooperate with us, but every new company needs winning over!

So, here at CAP, we are grateful that the Archbishop has spoken up. This issue needs to be in the government space, because this new sector of the industry is causing pain and injustice. We, the Church, must speak up about this issue and do something practical to help those caught in the midst of it. 

As for Credit Unions? People will always need credit and, for the poor of this land, to have Credit Unions as an answer to payday lenders or doorstep lenders would be a brilliant thing. As for putting payday lenders out of business? Well, we've always thought big at CAP and that is one audacious vision that Justin Welby is taking on! For us, we're praying that with God's help this vision can become a reality and that at the heart of every Credit Union, there will be the CAP Money Course providing the education to prevent borrowing in the first place.

Over 50 Job Clubs!

calendar05 July 2013

John Kirkby's avatar John Kirkby

This weekend we are training new Job Club Coaches from 20 new Job Clubs, taking our total to 51 across the UK! We are so excited to see the fruit of these new clubs, as people are helped back into employment across the country.

Can you live on a low budget without it costing the earth?

calendar01 July 2013

Amy Ross's avatar Amy Ross

Is it possible to buy stuff that’s good for people and the environment whilst living on a tight budget? If you’ve done the CAP Money Course, have you begun to think that you need to buy the cheapest versions of products available to avoid wasting money? Your motivation behind wanting to live cheaply is great, but let me free you from the myth that this rules out being ethical as well. As a Christian, I believe there are some general principles that can help to guide our purchases and honour God by caring for his planet and our global neighbours.

First, quality over quantity always wins. If the ethical product you want to buy costs more than its cheaply and chemically produced alternative, where possible it should be carefully saved for and purchased anyway. Then simply make it last longer. For example, to buy one pair of good quality shoes made by a company that pays fair wages, sources conflict-free, renewable materials and minimises factory waste will cost more up-front but will last longer than several cheap, high street pairs and will be repairable. Sure, it requires self-discipline to save up and then make things last, but with a CAP Money Course budget and motivation to worship God with your actions, it is totally possible.

To achieve this first principle, it helps to be free from fashion! Remember, most fashion was designed to make a few people rich, not to make this planet better for people, plants or animals – do you really want to buy into such an ideology? You can buy items from second-hand shops to save clothes and furniture going into a landfill and wear less makeup to reduce the amount of chemicals ending up in our water systems and plastic packaging lying in the earth. I believe that this small sacrifice will eventually bring self-confidence in your character and convictions rather than placing it in your appearance.

Thirdly, use your 'LOAF'. The letters stand for local, organic, animal-friendly and Fairtrade. Whenever possible buy items that meet one or more of these production standards. This will go a long way to reduce your carbon footprint and to support production of resources that is good for the land, people and animals – all of which are intrinsically valuable to God.

Fourthly, (and this is a general rule of good budgeting), planning ahead is vital. Planning your time well allows you to walk or cycle rather than drive, or reduce plastic by taking a reusable drink bottle rather than buying one every time you go out. Planning ahead will make it easy for you to take reusable bags shopping and check what food can be used up at home rather than being bought unnecessarily and resulting in older produce being thrown out.

Fifthly, remember that ‘sharing is caring’. Andy Flannagan, Director of the Christian Socialist Movement, says that “in our drive to make our lives efficient, we squander cash and potential relationship by idolising self-sufficiency". Does every household really need a drill that will be used, on average, for 12 minutes over the course of its lifetime (in the UK)? There are plenty of items that are used infrequently enough that they do not need to be owned individually but can be purchased in collaboration with others; take lawnmowers, for example.

Sixthly, take some tips from your grandparents! Traditional methods of doing day-to-day tasks are often more natural, beneficial to the local economy and are less wasteful of resources than the disposable culture based on instant gratification than we have today. Using baking soda and vinegar to clean the bathroom may seem weird, but it is cheap, effective and results in far fewer synthetic chemicals polluting our soil and water. The same goes for reusable nappies, which are actually quite easy to use these days, reduce tonnes of landfill waste and save a family hundreds of pounds over the course of several years.

Seventhly, reduce unnecessary packaging. Living on a tight budget, it usually makes sense to buy things in bulk rather than in individually-wrapped, smaller portions. The good news is that this is actually far better for the environment because it reduces the amount of non-recyclable packaging waste that ends up in our landfills. 

Finally, you’ll see that even if ethical living does not cost more financially, it does take extra time, effort and self-discipline. But instead of concluding that convenience always acts as justification for compromising our ethical standards, the eighth principle is to remember that there is no such thing as ‘convenient Christianity.’ The challenge of trying to choose ethical products creates a situation where we can rely on God and show total commitment to him in the way we discipline ourselves practically in our daily lives.

So when you are ‘making do’ on a limited budget, be encouraged that it is not beyond your reach to be ethical as well as to save money!

Amy is on our 'Reach' year long internship at CAP.

She's passionate about all things ethical, sustainable and green! You can find out more about Reach here.

Visiting CAP Canada

calendar17 June 2013

John Kirkby's avatar John Kirkby

This week I'm in Canada, visiting their (very) small offices and seeing some of the amazing work they are doing in establishing CAP in Canada.

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