Easy credit hurts all round

Rob Rose has hit it squarely on the head in his column “Gore on the floor at Lewis” ( Fine Print July 16-22)

I have often said that when the vultures go on a feeding frenzy the chickens will come home to roost. This was an extended feeding frenzy fuelled by cheap money. I have seen it with my own staff.

At Christmas time on the platteland, when staff get bonuses and go shopping, vultures such as Lewis Group step into the picture. A farm labourer walking past one of these stores is enticed in and 10 minutes later he owns a low-grade lounge suite, has been robbed of his bonus and has a very cheap cellphone as a present. The sales lady gets her commission, but the follow-through of the easy sale comes next.

A few months later, after the debit order dries up, he is handed over for collection. The collector then phones the employer and explains that his farm labourer is overdue and that they can make an arrangement for a R100/month repayment. At that rate he will never repay the amount owing as it increases by more than that each month.

Now we have these stores howling like banshees when they get fined for this type of evil selling practice, which has a knockon effect all through the economy. If the store does not lose millions for shareholders on profits and share price, it sells its book to institutions like African Bank, which think they can recover a portion of the debt, only to find that the goods cannot be recovered, or the debtor has moved house or passed on. They write off the debt, post a loss and erode the share price and it costs everybody money.

They deserve what they get, exploiting the ignorant with inflated fictitious fees and interest rates.

The winner is actually the farm labourer, who gets to use the purchase, be it furniture or clothing, never pays for it and does not worry about a credit record. He will do it again because some unscrupulous vulture will waive the credit rules for the sake of greed. Just another example of unsecured lending.