The big red truck with “Home Direct” on the side comes down my street quite frequently, and indeed I think the owner lives somewhere nearby. It represents one facet of the predatory high-cost lending market for those with few assets.
If you own a home, or a reasonable car, it is relatively easy to get a loan or one of the many forms of consumer credit. For those who do not have such security, and your income barely covers your direct outgoings (which is the case for more than a quarter of households), you might end up doing your shopping at Home Depot.
If you live alone and are without support or have a disability, Home Direct may also provide a needed service. Some people just can’t get out to the shops and mobile traders fill a gap in the market.
These trucks have been around for about 50 years, I believe. They operate in an environment where their clients can rarely afford to pay for their goods up front, so they deal, in effect, in unsecured loans.
From a lender’s point of view, the kind of debt created in this way is high risk. You can hardly take back the sweatshirt or trainers after they have been worn. Low income households tend to be transient and can move house very suddenly. As those living below the poverty line rarely have disposable income, getting repayments can be difficult.
‘Risk’, of course, in the finance industry, equates with ‘cost’. The trucks have two potential ways of mitigating the risk. The first is by loading up the up-front cost of the items they sell. So a $25 sweatshirt from the Warehouse might ‘cost’ $75 (or more) in the truck. Or, the sweatshirt costs a bit less but there are high interest rates associated with repayment over time, including perhaps an establishment fee and penalty interest rates. Or a mixture of both.
Either way, of course, people on low incomes are being gouged by excessive finance costs – they pay for their own lack of security and barriers to lending. They pay big money for the privilege of owning a few clothes. They pay for the default of their neighbours.
The situation of these trucks was briefly considered in the recent review of credit contracts. Among the suggestions made in terms of improving the law is some kind of licensing arrangement in which mobile traders will have to pass a ‘fit and proper person’ test. This is a good idea, in the sense that at least we can know that the people working in this field are not complete fraudsters (although the practices are still predatory). They will have to register on the Financial Service Providers Register, which won’t help your average family but may provide the basis for police checks.
A further proposal was to make ‘Do Not Knock’ signs legally enforceable, which essentially means to criminalise the practice. This seems to me to be a pretty daft suggestion. What are the police going to do when a homeowner dials 111 and reports their sign has been ignored? Will the person be charged with improper knocking, go up before the court and be fined? Will there be a three strikes law? Knock three times and you go to prison?
I am not in favour of the criminalisation of doorknocking in any form. It would also make the role of the mobile traders much harder (and possibly push up prices further) if they cannot call in each week to collect payments because someone has slapped up a ‘do not knock’ sign.
Avid readers will notice a general equivocation in this article. On the one hand I condemn the practice of high interest lending to impoverished households and that the poor have to pay more than the rich to get stuff. On the other hand, these mobile trucks make life much simpler for some people. The service is a needed one.
The law proposals suggest that the ‘do not knock’ rule and other practices will give more power to consumers. But there’s the rub, too. Because it’s not really power. All the studies done in this field show that, despite the high costs of borrowing, and difficulties in repayment, low-income consumers in these times really need access to credit in various forms to help ends meet. The mobile traders serve a crucial need. While it is not empowering to be the victim of price-gouging, it is even less so to keep your kids at home because they have no clothes for school.
High-interest credit in various forms has been rising exponentially in low-income households. It is one of the ways that the poor ‘cope’ with life. With real interest rates up to 800%, according to the Commerce Commission, regulation is needed to reduce the maximum costs.
But also we need to pull families out of poverty, and no lending rules are going to do this. There has been a massive growth in low-income, high-interest lending over the past few years, which can be put down directly to incomes and benefits being squashed down at the lower end. The fruits of Ruthanasia is poverty and rising household debt. Let us hope that the many working parties on this are going to find some solutions that work.
Dr Liz Gordon began her working life as a university lecturer at Massey and the Canterbury universities. She spent six years as an Alliance MP, before starting her own research company, Pukeko Research. Her work is in the fields of justice, law, education and sociology (poverty and inequality). She is the president of Pillars, a charity that works for the children of prisoners, a prison volunteer, and is on the board of several other organisations. Her mission is to see New Zealand freed from the shackles of neo-liberalism before she dies (hopefully well before!).
If there is an actual need for this kind of “service”, does the opportunity exist for a charity to start operating a mobile truck that sells basic items at the standard retail price and doesn’t advance credit?
The irony is that good quality, reasonably inexpensive clothing is available from charity-linked Op Shops. At acfraction of the price of those “direct” traders.
Mind you, Big, Red trucks make for a very easy, visible target . Just sayin’.
Pimp mobiles fencing cheap plastic Chinese made shit to the slaves.
The real problem here is how embarrassing it all seems to me. It shows up how fucking stupid and directionless the average suburban muppet is. Where’s the guts and fuck-that-for-a-joke attitude? Those little pimple trucks should be speeding off whilst on fire as they’re pelted with bricks for fucks sake. Where’re your balls people?
I’m sick and tired of reading about victims getting victimised.
Look? Ask yourselves? That’s if you can figure out who you are from your reflection in a mirror/puddle/etc? You do ask right? But the problem is you keep interrupting yourself. Every time you open your mouth? So do you, right? Can’t get a word in.
Ask yourselves, dumbasses.
NZ/AO = ? What? What does NZ/AO equal?
Rugby!?
No.
Piss Bro?
No.
Skunk?
No.
Tha Tee Vee?
No.
My turbo Mitsi?
No.
Shagging tha missus?
No
Fishin’?
No.
My new calf muscle tattoo which is a snarling Tiger aye?
No.
My new jeans which have the crutch down at my ankles?
No
My T shirt that says “ Not One Fuck Given”
No
My jandles over my socks which are on my feet aye? Amazing.
No
My custom mud spattered Toyota 4×4 with the cow horn sticker across the back window?
No
Meat eating?
No
Punching someone at the Pisser ‘cause? Dunno-‘cause?
No
Doing donuts in th’ Mitsi’ an’ that?
No
Let me help, if I can.
NZ/AO = rich as bro. So? How come most of you’s are fucked? You’re buying plastic clothes from a debt-pimp and our farmers are barely surviving getting $2.00 a kilo for wool?
You got that micro-plastic fibre in your poo. You know that, right?
Look around, Dumbasses?
What do you see? Do you see, for example, a vast, bleak ghetto on a barren land in the middle of a horrible continent suffocating under its own miserable bad luck. Or war torn and smashed and in despairing poverty. No resources, no way in, no way out. Polluted, toxic. People eating, breeding, shitting and dying on the same wretched spot. Is that NZ/AO?
I’ve been to countries like that. And that’s not NZ/AO. Is it, stupid? And yet? Here you are? Kissing the hands of your oppressors as they sell you a plastic shirt from a truck that’s really buying your soul. And your soul, in case you’re too stupid to work even that out, is that sparkle you feel when you love. When you laugh. When you do something beautiful and creative. Your soul is what you feel when your kids are happy and laughing, even if they’re being little shits. But debt. See? Debt steals your ‘soul’, a splendid matephor. Debt takes away your laughter, your lightness of being. Debt moves into your house with you and it settles down at your table and it steals your life and your laughter right out from under your noses. Dumbasses.
NZ/AO? Has a beautiful soul. Look at what our wondrous lands can give us? Only 4.7 million of us! And yet? We’re borrowing money for plasti-pap? ‘ What the fuck!’ just doesn’t do that justice.
Our oceans, our rivers, lakes and forests? Our beaches, our hills, valley’s and mountains? We dumb fucks live in a paradise powered by a beautiful soul and we allow scum in little trucks to cause us grief. And fancier scum in shiny glass buildings bleeding us out daily. We allow those scum to hunt us like prey. I think it’s probably time we all said “ Yeah-nah. Fuck this. “ Go and find a politician and express your concerns since you probably want to keep your soul.
Well, you’ve convinced me you’re very clever. Congratulations.
“The irony is that good quality, reasonably inexpensive clothing is available from charity-linked Op Shops.”
I’d suggest that NEW, good quality, reasonably inexpensive clothing is available in every western country other than New Zealand!
Nevertheless, Zack, cheap clothing IS available from the Salvos etc.I was a volunteer there once and as far as I can recall they are overwhelmed with good female clothing (not many for men) and about 30% ends up down the tip, for which the Salvos must pay tipping fees!
Also, I would have thought that a universal basic income would be a good idea. Do the schools teach basic survival skills? If not , why not.
Simple, make it so the only trucks on the road are owned and run by a workers co-operative. That to use the trucks service you must join the co-operative.
60 years ago I was a child living in Taita, a state housing suburb in the Hutt Valley. My mother sewed our clothes but if your mother worked in a factory, you wore clothes bought from a truck. They were easily recognisable, cheap & horrible. But not plastic – though you might “mend’ your flimsy footwear with sellotape so that a few of the poncey girls in my class would laugh at you.
Being poor makes you desperate – better to live in a society where the Zack Brandos & Adams (plus you & your mates) create better circumstances for you to make decent choices for your kids.
further proposal was to make ‘Do Not Knock’ signs legally enforceable, which essentially means to criminalise the practice. This seems to me to be a pretty daft suggestion.
I imagine it’ll work like the enforcement of the Fair Trading and Consumer Guarantees Acts. Doubt it’s going to be ‘criminalised’. Probably worth noting that the current govt has done more on this than the Liz Gordon ever proposed while in Parliament.
I have lived in loan and debt slavery for over ten years now, paying about 20 percent interest a year on something that could not be avoided years ago, as NO government support and cold shoulders everywhere.
WINZ are total shit, they do nothing, they only care about the debt you owe them, they leave your other debt for you as client to choke dead on.
The only way to get out of this debt slavery would be a full time well paid job, but for persons with health and disability issues this is impossible.
This government is all about nice talk and crap, they do NOTHING to help people like me, they leave us to rot, yet talk about winter energy payment and accommodation supplement increases that only some (not getting TAS or SB) do get.
They leave me to rot in hell, thank you for that, Jacinda et al, you are NOT there for people like me.
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