Everyone is here, from the brokers and profilers, like Mosaic and Baby Marketing, to the myriad businesses that provide the free gifts contained within junk. There’s a stand displaying sticks of seaside rock that say “First Direct—The Time Has Come to Suck It and See.”
The idea is that if someone is sent a sweet, they will be more likely to take out a loan.
• • •
LIKE A CHILD, I am drawn to the bright colors of the Post-it note stand, where Post-it notes of all the colors of the rainbow are displayed within glass cabinets like rare jewels.
(It is, by the way, possible that Stanley Kubrick may have influenced 3M’s decision to diversify from their original yellowy-green into other colors. As a great fan of stationery, he once telephoned the head of 3M to suggest they branch out into blues and reds and so on. The man ostentatiously sighed. “If we did, there’d be no end to it,” he said. But it was only a year or two later that the other colors began to appear.)
“Ever thought about using a Post-it note on a direct mail piece?” asks their publicity material. “Studies show that machine-applying a printed Post-it note can increase your response rate by 18 percent.”
I ask Peter, who runs the stand, how it works. He shows me a recent piece of junk mail from Capital One. It consists of an offer letter from the credit-card company outlining all the terms and technicalities, the APRs, and the extra charges. Stuck on the front is a bright-yellow Post-it note, which reads:
This week I will . . .
Exercise.
Eat Healthily.
Sort out my finances. Call Capital One on 0800 . . .
“See?” says Peter. “The letter has all the technical details. You throw the letter away and keep the Post-it note!”
• • •
I CALL RICHARD HOLMES, a spokesperson for Capital One. He says, “By using a Post-it note, we are attempting to highlight the key issue for potential customers, which is to contact Capital One. This initiative in no way seeks to detract from the importance of the terms and conditions which have to be read and signed by anyone applying for a card.”
• • •
AN IMAGE KEEPS POPPING into my head. It’s the old days. A customer in need sits down with their bank manager, who says, “A thousand pounds? You must be crazy! I’ll give you three hundred.”
I wonder: Is there some economic sage out there who effectively invented the new way—someone who drew up a utopian image where banks would fall over one another to loan money to whoever wanted it?
And so I call Lord Brian Griffiths of Fforestfach. He’s the vice chairman of Goldman Sachs International, a former director of the Bank of England, and once the head of Margaret Thatcher’s Policy Unit. I’d been told that if anyone could answer that question, he could.
I ask him if this whole mess can be traced back to one man. I expect him to say something like “Oh, no, it’s far more complicated than that. It is a gradual shift. Nobody is to blame.”
But he doesn’t. Instead, he says, “I hate to say it, but I was one of the people who argued strongly in favor of it.”
“When was this?” I ask.
“December 1970,” he says. “At that time the banks were a classic cartel, very much a middle-class preserve, and I believed that the democratization of credit had to be a good thing. Everyone in principle should have access to credit.”
So in December 1970, he says, he wrote a paper for the Institute of Economic Affairs advocating a revolution in banking. The report, Competition in Banking, concluded: “The only way in which to make banking a competitive industry is to remove all obstacles to potential new entrants into the industry.”
It was, by all accounts, a key factor in the subsequent deregulation of UK banking.
• • •
IT BECOMES OBVIOUS during my conversation with Lord Griffiths that he’s come to believe he’s unleashed some kind of monster. He says he never could have predicted “the dynamism” with which the lenders would pursue his ideas.
“The dynamism,” he says. “The innovation.”
I’ve never heard these words uttered with such sadness.
“I don’t think anyone would have foreseen how innovative and aggressive and competitive the financial services would become in their techniques,” he says. “The whole lot of them are to blame.” He pauses. “I’m not advocating a return to the status quo. But the pendulum has swung much too far.”
Now Lord Griffiths has just published a new report—What Price Credit?—which has this somewhat apocalyptic conclusion: “The sheer scale of consumer debt [£1 trillion] has made millions of households extremely vulnerable to shocks to the economy . . . such as oil price rises, acts of terrorism and wars . . . Debt is a time-bomb . . . for the fifteen million people who struggle with repayments.”
I tell Lord Griffiths about Richard Cullen’s suicide and he sighs.
“I had a friend,” he replies. “A clergyman. I met him for dinner one night. He was suffering from cancer. He broke down over dinner and confessed to me that he had thirty-two credit cards. He said he was using each card to pay off the charges on the others. He told me about the shame he felt. You could just sense the emotional pressure. I’m no doctor . . .” Lord Griffiths pauses and says, “He died soon afterward.”
Then he says that a friend of his recently compared the credit-card industry to slavery—that the lenders are the new slave masters, and the borrowers are the slaves.
I ask Lord Griffiths if he’s bombarded with credit-card junk mail and he says, “Oh yes. I probably get one every fortnight.”
I say that the Cullens were sometimes getting three or four a day. “Hm,” he says. “I would call one a fortnight bombardment.”
• • •
AS I WRITE THIS, in mid-April 2006, the homeless charity Centrepoint has published a report revealing that almost a quarter of homeless youngsters surveyed have been sent letters from credit-card companies urging them to apply for loans, with interest rates as high as 29 percent. Somehow, it seems, the list brokers have been able to buy up the names of young people living in hostels and halfway houses.
Since I began writing this article, in January, I have paid Visa about £300 in interest and minimum repayments. I keep thinking I should pay my Visa debts off in full and slice the card up. But I haven’t bothered. This is because—like millions of us—I am lazy and stupid.
• • •
ON APRIL 26, Wendy and two of her children arrive at Salisbury coroner’s court to hear the verdict. The coroner says the cause of death was carbon monoxide poisoning: an 85.7 percent saturation.
“I can tell you, Mrs. Cullen, that is very high,” he says. “That concludes the postmortem evidence. I am satisfied that his intention was to take his own life. Can I also say, Mrs. Cullen . . .”
Wendy is hoping he’s about to say something critical of the credit-card companies. But instead he says, “Thank you for coming. By gathering here together we do right by your husband. I formally close the inquest.”
There is one piece of good news. The credit-card companies have all written off the debts now.
“It makes me sad how easy it was for them to write it off,” one of Richard’s daughters tells me in the corridor outside.
The Sociopath Mind Guru and the TV Hypnotist
It is a Friday in April and you’d think some evangelical faith-healing show was occurring in the big brown conference room of the Ibis Hotel in Earls Court, West London. The music is pumping and the six hundred delegates are ecstatic. And it’s true that there are lots of damaged people here who’ve come to be healed. But this is no faith-healing show. The speakers are atheists. And the audience is full of people from British Airways, Virgin Atlantic, British Gas, BT, Bupa, Dixons, the Department for Work and Pensions, Ladbrokes, and Transport for London. These people have come to learn how to be better in the workplace. Now the audience jumps, cheering, to its feet. I look behind me. And I see him passing through the crowd looking like Don Corleone, square-jawed and inscrutable: Richard Bandler.