Credit institutions should share knowledge rather than hard selling to uplift the financial standing of our communities

There are many credit institutions who know me, I am sure that they know you too! Every day I am inundated with communications from them. In certain instances, some of these companies probably know me better than others; as I am customer under a bigger brand of their company. They've been able to profile me down to my income, job title and interests. In some of these instances the saddest part of their continuous and reckless credit offers to me are directly insulting to the core business principles of financial wellness and financial longevity.

It must be said though, that a lot of the offers I receive daily are from other places who don’t really know me like they lead onto with the information they have, as we haven’t been formally introduced. A lot of these companies will never have me as their customer but they sure try. The desperation sounds like they’ve heard of me, or obtained my information on the sly, through sources which I haven’t agreed to – but that is perhaps a conversation for another day. I’d even go as far as saying that the continuous offers and not taking my response of “NO” as an answer borders on the deranged and annoying sales tactics we’ve all grown to hate. 

These credit institutions act like they are my best friends and contact me via various channels. They call, they text, they email and even send me letters (or worst credit and store cards with my details on them) in the post.

Collectively these credit companies who know me so well - offer credit in various denominations all with many 0's on the end of the number. This is offered ALL THE DAMN TIME! The marketing ploy is simple, slightly desperate and it seems like these companies want to give me money away, for free – how fantastic! It almost sounds too good to be true, because it actually is.

In the grand scheme of things and given the huge influx of offers I've received, not once have these companies advised me of the risk of taking on additional credit could have on my financial well being or what I would actually be paying back when my term of my credit loan was done or worse, the implications of not being able to pay this back.

As a general consumer of goods across the globe and as a business owner within South Africa, I truly believe that this approach to marketing sucks! I do feel sorry for those people who you are approaching in the same manner that are already in financial distress, who are desperate for a lifeline to hold onto and who will have no option but to take you up on your offer only for them to be pulled into the quicksand of high repayments and down the line a real bad credit score.

As this hard selling has started to grate my cheese at the increased number of offers I keep on receiving I did some reading on the matter of reckless lending.

The National Credit Act states that, reckless lending is when a credit provider does not conduct an affordability assessment before entering into a credit agreement with a consumer. If a consumer does not understand and acknowledge the risks, costs or obligations, this is also considered reckless lending.

I am concerned for the most financially vulnerable, think of the most financially uneducated when I see these text messages or receive the phone calls or the letters or even the store cards in the mail… lately even when my own bank annoyingly insists that I increase my credit card limit. Even more so at a time of such global uncertainty.

As a business owner, I get it. We all want new business. We’re desperately looking for new clients to make sure that targets are met and our client retention remains in force. It is a damn scary time to be a business owner. In the middle of a global pandemic as well as only recently having our South African rating downgraded to negative. As business leaders we should be worried about our social impact during this global crisis of a pandemic. Its the perfect opportunity to rather be known for spreading and leveraging your knowledge.

A simple solution to all these companies that are scrambling trying to obtain new clients by offering them credit – perhaps need to take this time of nation wide lock down to look at themselves introspectively look at their core values. Those values should be there to encourage individuals to learn to budget. To then learn how to save. Then, when the time comes how to borrow money responsibly. For years to come, uplifting communities rather than drowning them in debt and large repayments will provide value for your brand and create a feeling that people will want to work with you when the time is right to borrow.