Just before I phoned, Wendy opened a letter from the credit-card company MBNA. She assumed it was about the debts. Richard had three MBNA cards and sheets of MBNA credit-card checks, which he used to pay his Goldfish minimum repayments. Wendy knows this because she found the stubs stuffed behind the washing machine a few days ago when it was pulled out for repairs. There they were, in Richard Cullen’s neat handwriting: “G/Fish £172.53.” And so on.
But the letter she received from MBNA today was something different. It read:
Dear Mr. Cullen
Let’s face it most of us encounter financial problems at some stage in our lives. All it takes sometimes is a little bit of bad luck.
The letter goes on to offer Richard Cullen, who has now been dead for three months, a £15,000 loan. (“10.9 percent APR variable. Loans are secured on residential property.”)
“Just imagine,” the letter concludes, “this could give you a much needed light at the end of that dark tunnel.”
In 2004, MBNA’s profits were one and a half times that of McDonald’s.
• • •
THE CULLENS are beginning to piece together the minutiae of the mess Richard got himself into. They’ve found credit-card statements stuffed in drawers and behind wardrobes all over the house. Wendy says I can come down and look at them.
While I’m sitting there, I hear a key in the front door. It is Christopher.
“Did you hear the radio?” he says. “Barclays has just announced its highest-ever profits. Four point five billion pounds. Seven hundred and sixty-one million pounds from Barclaycard.”
Wendy lights another cigarette.
“Did your father have a Barclaycard?” I ask.
“Three,” says Christopher.
“You’d think that would have triggered something off in Barclays’ computers,” says Wendy.
“And on top of that,” says Christopher, “Barclays gave him a six-thousand-pound loan.”
“Oh my God!” says Wendy. “I didn’t know that.”
“Which they upped to thirteen thousand pounds,” says Christopher. “That’s twenty thousand pounds in repayments over sixty months. That’s just that one loan.”
“How did they let him do that?” says Wendy. “He must have been crazy!” She pauses. “Barclays shouldn’t have done that,” she says.
Christopher drives me to his house to look at the statements. There are half a dozen files thick with them. There’s a Jiffy bag, too, filled with sliced-up credit cards, cut in half when Richard Cullen finally admitted the problem to his wife. MBNA, Goldfish, Tesco, Amex, Frizzell, etc., all sliced up.
A typical page of a Richard Cullen credit-card statement reads like this:
Alliance and Leicester
Interest charged: £71.07
Late fee: £25
Overlimit fee: £25
There are thousands and thousands of pounds’ worth of these £25s. Then there are letters, too, like this from Barclaycard:
According to our records your Barclaycard history has been excellent and we have consequently enrolled you in our Guaranteed Acceptance Masterloan Programme. This means we have set aside £7,000 for your immediate access without an application or any questions whatsoever.
And then, later, another letter from Barclays:
Dear Mr. Cullen,
We regret that we have been unable to pay the following, as there were insufficient funds in your account:
Payment in favor of Frizzell for £554.09
Payment in favor of Barclaycard for £339.06
Your account has been debited £30 which is the fee charged when we are unable to make payments due to insufficient funds.
This letter did not come from a human being. A computer, with the printed signature J Smith, churned it out. There are a number of identical ones—signed by J Smith—dating back to 2002. How can Barclays say Richard Cullen didn’t seem to be in trouble, when payments were being declined from one corner of Barclays to another? At one point, Richard Cullen went 17p over his Lloyds limit. He was charged £20 for this, and then the interest on that £20.17, and so on.
And then, finally, in the last weeks of his life, scores of letters like this:
Your failure to pay your arrears of £166.04, despite our reminders and offers of assistance, has forced us to withdraw your credit line and take steps to inform the credit reference agency.
The statements tell the story of a man who thought he could beat the credit-card companies at their own game but discovered that he couldn’t. He’d been telling the truth about his absence of secret vices. In the last year of his life, almost every payment on every page of every statement was to a different credit-card company. The odd exception was nothing: a £13 subscription to a gardening magazine, and so on.
But he had lied about one thing. Richard Cullen, at the time of his death, didn’t owe £30,000. He owed £130,000.
• • •
I CALL KEITH TONDEUR of Credit Action, which monitors our spiraling debt problem. I tell him what Wendy had said about how hard it used to be for people like them to get loans.
“That’s right,” he says. “Thirty years ago you’d go to your local bank manager. He’d say, ‘A thousand pounds? You must be joking. I’ll give you three hundred.’ We go into banks looking for the best advice, but I know one chief executive who describes his branches as ‘shops.’ We treat our bank managers like we treat our doctors. They say, ‘Ah, you’ll need to buy some insurance with that, sir.’ And we believe them. But in fact we’re just being sold things. And this is an industry that’s self-regulating. Why is that?”
• • •
LATER I HEAR the story of why it takes three days for an electronic transfer to clear. Transfers used to really take three days to clear, in the days they were delivered by carrier pigeon, or whatever. But now, in this computer age, they take an instant to clear, but they keep the three-day rule going so they can accrue three days of interest. The banks make tens of millions from these wheezes.
• • •
IN OCTOBER 2003 Matthew Barrett, the CEO of Barclays, was called before the Treasury Select Committee. He was asked about the small print. Even though the base interest rate had gone down to 3.5 percent, buried away in the small print was the revelation that Barclaycard was charging 17.9 percent interest.
“The small print,” Matthew Barrett admitted to the committee, “is an eye test for sure.” Then he added, “I do not borrow on credit cards. It is too expensive.”
• • •
I PHONE BARCLAYS again and speak with a press officer. I quote him his CEO’s statement, that the “small print is an eye test for sure.” He laughs and says, “That sounds like Matthew.”
Then he turns serious and says, in terms of the small print, they have made “huge steps forward in the past twelve to eighteen months. All the credit-card companies have taken out the really important bits from the small print and put them in big letters in the summary box.”
This sounded comforting. Or at least, it did until the day I attend the International Direct Marketing Fair at Earls Court, West London. This is the junk-mail industry’s annual convention.
Even though a sign near the door at Earls Court reads “62 percent of consumers agree with the statement ‘I enjoy going through my post,’” the mood here is undeniably panicky. Sue Baker, the PR lady in charge of the event, had told me over the phone, “People are really worried.” More and more consumers are ticking the no box. They don’t want their details passed to third parties.
“The list is severely compromised,” said Sue.
An article in today’s Direct Marketing International magazine doomily predicts, “In a couple of years there will be no cold telemarketing industry in Norway. Could this happen here? Well, wake up! It is happening.”
Six point eight million British people, the article continues, have so far signed up to the telephone preference service, which filters out cold calls.