Emma Bryn-Jones of Zero-credit Limited

We spoke to Emma Bryn-Jones, a company director of Zero-credit Limited, to find out how her book was responsible for the launch of consumer co-operative Zero-credit - which is dedicated to campaigning about finance issues on behalf of its members...

 1) You’re not a debt management company, but you’re heavily involved in the industry, could you tell us a bit more about what Zero-credit Limited does?

Zero-credit is a consumer co-operative that represents borrowers’ rights.  We’re non-profit making and self-financing, so our trade in personal finance research and development funds campaigning for issues of importance to our Members.  Our paid work has two strands - off the shelf publications and bespoke commissions.  This year, these activities continue to fund our support for better regulation of high cost credit and at our October AGM, Members voted to back the No More Excuses campaign for basic bank accounts also.

2) What is your role within the company?

I am one of three company directors with legal responsibility for Zero-credit and I sit on our coop management committee.  I wrote Zero-credit as a book in 2008, launching it as a digital project in June 2009, and inviting others to help me form it as a co-operative in August 2010.  Since then I have held responsibility for Business Development and, on a day-to-day basis, I manage many of our research and development projects.

3) What’s the ethos behind the cooperative?

That “no borrower need ever feel helpless”.  From this, we created our Borrowers’ Charter, which, in practice, means making informed choices together.  Consumer participation with debt specialists, credit providers, regulators or any other professional or organisation with a stake in personal borrowing is essential.  To achieve this, we engage with three communities: our digital audience, who may be people or organisations; our Subscribers, who are professionals and organisations; and our Members, who co-own our company and are individuals with personal experience of borrowing.

4) Is there anything that you think can be done to reduce the huge levels of debt in the UK?

Yes, stop the blame culture and reward initiatives for tackling it! As a country, we are collectively responsible for £1.5 trillion in personal borrowing and unless we put the mistakes of the past behind us, our economy will not recover from income shock. Conflict between borrowers, lenders and intermediaries increases the risk of default and £1.5 trillion has the capacity to damage us all.  Consumers are used to having choice, so getting out of debt needs to be almost as easy and attractive as getting into it.

5) What do you think will be the single biggest issue the debt industry will face in 2012?

Trust. Money saving is on trend so everyone and anyone is at it. The technology to spam and scam is immense and the accountability for such actions negligible, not least when the regulators are between a rock and a hard place with cuts to public spending.  Any debt advice or resolution provider who wants to retain consumer confidence needs to communicate transparency, integrity and respect for others who operate fairly - whether fee-charging or free.  The return on investment will be long-term, but after at least a decade of unprecedented growth in consumer credit, we need to look at the bigger picture.

6) What is the most common reason for people getting into debt?

Unforeseen circumstances, which may seem a bit of a cop-out, as I’m sure there are times when each and every one of us has knowingly overspent.  However, when we look at the context in which personal borrowing grew to its current level, this was cultural.  Credit was on trend.  Few people predicted the crunch, so it is counter-productive to criticise others for borrowing more than they can now afford to repay. Guilt is hardly an incentive to repay either – we need to be firm but fair.

7) With so many people in debt do you think more needs to be done to encourage people to take a better approach to managing their finances?

That’s a tricky one, because financial capability and education are fundamentally about behaviour change.  The potential for a conflict of interest is significant, so while better money management is undoubtedly necessary, definitions of what is effective may be biased. That’s why Zero-credit is a co-operative.  There are undoubtedly financial products and services that make the industry a lot of money, but that don’t necessarily complement consumer behaviour.  We explored some of this in “The Welfare Costs of Personal Debt”, last summer.

8) Are you in dialogue with debt management companies and Financial Services regulators?

Yes. In fact, we’re so committed to dialogue that we’ve just introduced the post of non-Executive Director - Subscriber Representative.  Mike Thomas, founder of Debtwizard, is shaping the role prior to elections at our AGM next October. We chose Mike to develop our dialogue, because he bridges the divide between free and fee-charging providers.  You see, we have a number of debt and financial education charities as Subscribers too. We have to – you all work with consumers!

9) Do you expect the financial situation to improve in the coming months?

No. Successive governments have tried everything in their power to stop the full force of the 2007/8 collapse from hitting us, but economic stimuli are insufficient to cover the gaping hole that has been collective overspending.  You have only to look at something as simple as the Halloween market, currently worth around £310 million, from circa £12 million in 2001, and next to nothing a decade before that, to see that we’ve created markets for discretionary spending that we simply cannot sustain.

10) If you had one piece of advice to give to intermediaries in the debt management sector, what would it be?

Financial services are awash with ideas for engagement through new technologies. For the most part, they continue to dissect and exploit potential, rather than to explore and optimise it. Ethically, debt resolution is a one-off, so the temptation to harvest is great.  However, growth demands nurture and people with money worries crave that. If the debt industry can harness the strengths of both profit and non-profit making models to become the champion of recovery, goods and services that truly support sustainable spending will prevail.