The Creditor-Debtor Relationship: Low Level Disruption

Emma Bryn-Jones from Zero Credit guest blogs for ClearDebt on the relationship between creditors and debtors.

Following on from the post Lloyds TSB: letters to people in Debt Management Plans I wanted to think more about how creditors manage the behaviour of people in debt.

It feels odd writing this when Zero-credit is a consumer cooperative representing borrowers’ interests, but the fact is that many of us still do not bite the bullet when financial difficulties are taboo. But what is a creditor supposed to do when we don’t get in touch? Certainly not bring out “Counterfeit Lawyers 4 U”, that’s for sure!

Creditors to debtors are like teachers to pupils

Oddly, I am reminded of challenging classroom behaviour, or as teachers call the bulk of it, low-level disruption. Kids chewing gum, over-knotting school ties, chattering throughout the lesson on a non-uniform day – challenges to authority that we may equally apply to a creditor in the play of everyday life – sod you for adding charges, you overpaid git! Just as much as kids baulk at the reality of sitting GCSEs, so too are adults perfectly capable of omitting debts from a pressing to do list.

Whilst such actions demand reactions, a good teacher knows when not to apply sanctions. With a class of 30 kids champing at the bit, the last thing anyone needs is to escalate the situation. Thus, when confidence in the banks is at an all time low, turning the screws serves only to sever the few ties remaining and end any possibility of a desirable outcome. This is a dangerous precedent to set, when economic uncertainty is the norm.

What can creditors do?

In the teacher’s toolkit, alternatives to dishing out detentions and exclusions include creating layer upon layer of warnings and contrasts: a raised eyebrow, the look, standing close to a trouble maker, or rewarding the bad kid turned good, anything and everything to prevent confrontation. Interestingly, we are beginning to see signs of this from utilities providers. Plusnet, for instance serves a polite reminder that Internet connection may be lost if the bill is unpaid. The account holder simply acknowledges the notice before carrying on browsing.

Gentle reminders that I’ve got the power to keep you at break, stop your pocket money, or restrict access to services is, of course, how the vast majority of us parent our kids. If the creditors would only stop and think about it, austerity Britain is one great big kid with more people committed to credit than any previous recession has witnessed. Getting out of this mess is a learning curve for us all, but one thing’s for sure, scaremongering the cash-strapped taxpayer who bailed you out only to find that you still got your bonus is not the way forward.

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