Make no mistake, debt recovery is big business. Amazingly, for a country with a strong tradition in education, the national curriculum to this day, includes no mandatory education for primary or secondary school pupils on managing personal finances. The sullen teenage refrain of “but when are we going to use this, sir?” may be a misguided attitude towards basic education in algebra or chemistry, but if there is one topic that every secondary school pupil will use at some point in their adult lives, it is financial education. We provide sexual health education as part of the national curriculum. We even insist on the mandatory study of a foreign language, despite being introduced far too late to be effective. Study of “classic” literature (as determined subjectively by a body of English professors) is included. As is a rudimentary education in physics, chemistry and biology, which while incredibly significant and valuable, probably is not going to be used by a lot of these pupils. Why no class on managing personal finances?! It seems absurd.
Nevertheless, some organisations are profiting greatly from this oversight. Decades of pre-approved credit cards, TV advertisements for personal loans, “buy now, pay later” schemes, automatic overdraught facilities and now, as if to bring us full circle, TV advertisements for debt consolidation lawyers have culminated in a nation where more people than ever are struggling with insurmountable debts. Businesses which offer commercial debt collections typically claim 10% commission on these debts and pursue debtors eagerly, profiting greatly from this financial ignorance that only continues to propagate in a credit driven culture. Similar to the obesity problem in the UK, which is similarly excluded from the curriculum and unscrupulously leveraged by fast food conglomerates and food retailers for profit at the expense of the population at large, the finance industry has too much too gain from the situation to be trusted to adequately regulate lending. For a lender, a customer who can’t pay is a near limitless vein of interest to mine, rather than a life in peril. The incentives are not there for financial institutions to adopt more ethical practices toward debtors.
Ultimately, there will always be a place for the debt recovery industry in society – there will always be individuals that fail to honour repayment of their debts. However, perhaps with better education and a more proactive approach, we can avoid funnelling large swathes of our population into these kinds of debt spirals.