Overdrafts, bank loans and credit cards are keeping the world economy bouncing along. The plasma telly might cost a grand, but if you chuck it on the plastic it’s yours right away (at no extra cost, of course). And how much unsolicited post have you thrown away (well, recycled) offering you instant access to consumerist heaven with an unsecured personal loan? Everyone from Tesco to the RAC is getting on in the act. And millions of families are using credit just to keep above the breadline.

Surrounded by multi-million pound advertising campaigns using the latest psychological gimmickry to persuade you to keep them cash registers ringing, no wonder so many people find themselves out of their depth. Personal lending is one of the few aspects of banks’ financial behaviour that isn't rigorously controlled by law - instead it’s governed by a voluntary code of conduct. Banks and other loan sharks actively chase those with a history of not being able to handle their finances. Lower down the food chain some lending organisations trawl through court listings looking for those on the receiving end of county court judgements to make generous offers of the ‘turn all your little problems into one big problem’ variety.

The ‘Home Credit’ industry is booming and no wonder - it typically charges its unemployed borrowers interest rates of more than 400%! The main loan shark is Provident Personal Credit which is greedily pushing its way into recently de-related Eastern Europe.

Debt is a big, booming business, and those making the cash are the usual suspects based in London’s boardrooms. The ‘debt sale and purchase’ market in the UK has been mushrooming, as financial institutions buy up banks’ debts for a fraction of their value to then hassle the hell out of the debtors to pay up. Around £4.5billion worth of debt has been sold for a cut price £300million, and so far collectors have squeezed almost £500million out of people in debt. Nice little earner!

Apartheid profiteers Barclays are the real financial muscle behind companies like Cabot, which is hosting next week’s "debt collections conference." Jointly organized with industry rag, ‘Credit Today’, the conference is a snip at 500 quid plus VAT (but don’t try sticking on yer card). Once you’ve been to the gripping workshop on "What every Debt Collections Manager wants for Christmas"! you’ll no doubt be starving hungry for the evening meal (a networking bargain at £1,275). Meanwhile new powers for bailiffs to enter houses (see SchNEWS 565) will make ‘debt recovery’ that much easier and profits that much bigger.

Ethical consumption and Fairer Trade are increasingly been used to justify continued guilt-free consumption, so hey! why not stick those hemp trousers on your Greenpeace credit card?! But Fair Trade is becoming more about big business than small producers: "When Fair Trade roses came in," says Paul Monaghan of the Co-operative Group, "Sainsbury’s got them first. We were all fighting over the roses!" Now, even Nestle is moving in on the Fair Trade game (see SchNEWS 515), animal testers L’Oreal have bought the Body Shop (see SchNEWS 542) and Bono Ltd launched ‘product RED’ this year (see SchNEWS 544). "It's sugar coating on a bitter pill that can prevent us from focusing on the real issues" argues Indian activist Anuradha Mittal.

With the government’s own research showing that debt hits the poorest hardest, what’s the proposed solution? Yep, that’s right - its time to cut benefits again!

The Welfare Reform Bill is winding its way through parliament, promising a ‘Pathway to Employment’ for the sick and disabled. Incapacity Benefit claimants will soon be summonsed to attend ‘work-focussed interviews’ as the government aims to get 400,000 people off the benefit and into low-end, dull, monotonous, minimum wage jobs. 300,000 lone parents are to be targeted too, as the new Employment and Support Allowance starts to replace Income Support. Clamp Down Britain continues unabashed with the usual Anti Social Behaviour stuff thrown in for good measure; this time proposals include cuts to benefits for parents of unruly kids.

The Coalition Against the Welfare Reform Bill are planning a ‘Day of Action’ on the 4th December 2006. Meet 11 am at the St Stephens Entrance to Parliament.

- from Schnews, 24th November 2006