The debt collectors

Publilius Syrus (1st century BC) - an Assyrian brought as a slave to Italy, but by wit and talent won the favour of his master, who freed and educated him - once said “A small debt produces a debtor; a large one, an enemy”.

Most Australians have heard of Dun and Bradstreet. If they don’t recognise the shortened title version then they most definitely will recognise the company on viewing their full title: Dun and Bradstreet Debt Collection.

I’ve had a few letters from them in the past and I’m sure most Australians have, at some time in their adult life, had cause to take a deep breath before opening an envelope with their letterhead on it. Some debt may well have been an oversight and may have been promptly addressed, while other debt of a more serious nature may have been referred to the Credit Reference Association of Australia (CRAA).

Once your debt hits the CRAA office and your name is listed - the chances of you getting a personal loan or credit card from a bank can be severely limited. There are of course many loan sharks who are more than willing to do business with you if you have problems at your local bank. These are the operators who advertise on the radio and television with slogans such as: “If you’re out of work and have a bad credit history then you must see us for a fast personal loan”, and are prominently located in most towns throughout the nation.

I haven’t personally entered a pawnshop nor done any business with one but I know many relatives and friends who’ve parted with their prized video, watch and other portable items of value. Most say it is to tide them over with grocery money until pay day - and some I suspect are looking for a few extra dollars for entertainment or gambling purposes.

Judging by the number of people who go in and out of pawnshops it would appear there isn’t the same level of stigma attached to entering such premises as there use to be. Where once it was a “shame job” - visited only when the chances of being seen were limited; early in the morning or late in the evening - it now appears as though circumstances have changed. People of all races and professions are not the slightest bit concerned about having a public association with taking out a short term loan with a pawnshop when experiencing financial hardship.

The provision of access to an overdraft facility or increase in credit card limits - a normal course of action for people with a good relationship with the local branch manager of their bank - is sadly not an option available to those who seek out pawnshop financial agreements.

While bank loan interest repayments hover at about of 8 to 10 per cent, the pawnshop proprietors, who take higher risks with their money on unsecured loans, can afford to have higher rates attached to their repayment terms. For instance, if you took out a loan on $2,000 you would be charged at 8 per cent with an establishment fee of $350 and an additional fee of 1.8 per cent on top per month.

If you traded in an item to the value of $500 (plasma TV for example) you would incur an interest rate of 35 per cent ($675 for the first month and $911 for the second month). If the repayment on the loan isn’t paid within 90 days the pawn shop proprietors give the owner a further seven days to finalise the account or the property is surrendered to them. With this system, if you were to come up with the money to buy back your plasma TV after the 90 day period, including accrued interest the sum of $1,230 would need to be exchanged.

You might frown and be amazed at the exorbitant fees incurred by these financial entities, but they exist and continue to flourish because many members of our community are doing it tough and seek their services.

The other day I waited patiently in a long line at a service station to pay for the diesel in my SUV, when a small commotion at the front of the queue caught my attention. I observed a non-Indigenous woman with three small children searching inside her handbag for extra money to pay for the items collected from the store of the service station. There were disposable nappies, bread, milk and breakfast cereal, and from where I was standing it looked like she was going to be placed in the embarrassing position of sending one of the items back with a child to the shelf where it came from.

I immediately forced my way forward and asked the woman behind the teller what the outstanding amount was, and on hearing $7.50 I handed over a $10 note to cover that amount. The woman quickly gathered up her items and rushed, without saying a word, out of the service station with her children; probably more out of embarrassment than fear.

After I completed the transaction for my purchase, I walked to my car and noticed a stationery vehicle not far from mine and on closer inspection I saw the driver was the woman I assisted moments earlier - she’d obviously been waiting for me to arrive at my car. As soon as our eyes met, the woman gave me an affectionate nod and drove off down the road with her children restrained in the back seat of the car.

We didn’t say anything, and that small nod was evidence to me that she was grateful, if not slightly embarrassed, for my assistance on payment of her shortfall.

I reflect on this particular instance, not to reveal my altruistic side, but more to express my angst at seeing other people; businessmen and women, who saw what was happening inside the service station and chose not to help a woman, with a small amount, in financial distress.

I guess this caring part of me is more an expression of life skills gained through my parents and the fringe camp I lived in when I was a kid on the outskirts of Cunnamulla in South West Queensland. Living among 350 other displaced Indigenous people on the fringe of a prosperous white community, I observed the caring and sharing nature that was apparent each daily. The sight of neighbours and even people unfamiliar to me, coming to our home and asking for bread, milk, or tea, was not something that aroused concern.

Caring and sharing back then was routinely accepted by all members of the fringe camp out of necessity for sheer survival and I don’t recall seeing any disputes between families as a result of a favour not being returned.

Today, in our globally competitive times, things are different. Our social and economic positions resemble nothing of the days of my formative years growing up on the outskirts of town. Today it would appear that everything is about the immediacy of advancing the individual, or the immediate family, at all costs.

In the rush to keep up with societal norms: buying a home, getting the kids a good education and acquiring the latest fashion (clothes, cars, furniture, mobile phone and so on), extended family and friends become a secondary concern and their needs and wants are for them to sort out. The non-caring or sharing attitude of today’s generation has precipitated the need for some people to seek out excessive fees on offer at pawn shops when the going gets tough.

India and China’s insatiable thirst for oil, burgeoning populations and desire for more nutritious foods continue to force the price of consumables up causing financial stress. Our ability to accommodate price changes is lessened.

I don’t particularly like paying more than $100 to fill up my car with petrol, nor do I enjoy paying a third more for my groceries than I did a couple of years ago, but they are the realities of life.

I don’t know how I would’ve been able to do the things I do for my family today, if I hadn’t made the definitive life changing decision six years ago to give up drinking and gambling. The sacrifices in my family haven’t been all mine as my wife Rhonda gave up her expensive smoking habit and my son took on a casual after-school job when he turned 14. My son, Stephen junior, recently paid for his school trip to Perisher Blue ski fields from his savings, and continues to pay for his own entertainment including going to the movies and buying his own Playstation games and accessories, among other things.

There’s a lot we can all do to ward off letters from Dun & Bradstreet Debt Collection agency. If people are serious about addressing their financial woes, maybe a logical starting point might be to tackle the hardest tasks first. The problematic issues are generally the things we all say we can’t do without - our comfort habits: the cartoon of beer or cask of wine once a week, a packet of cigarettes everyday, a night on the town on weekends, a bet on the horses, a gamble on the pokies, scratchies, lotto and the “must have” latest clothing range.

Additionally, the biggest habit to break of all is the vicious cycle of lending and borrowing from high-risk family members and friends who don’t repay on time, if at all.

If you can address the expensive habits that chew up all of your disposal income then you can take the power away from the people you borrow from, including the pawnbrokers. Furthermore, if you stumble on the way to ridding yourself of those bad habits, always remember that famous saying of Publilius Syrus: “A small debt produces a debtor; a large one, an enemy.”