Hidden credit counter

The face of consumer credit has changed drastically. Not so long ago, you had to walk into a bank to a person behind the counter and tell them that you wanted to take out a loan. Today, consumer credit is no longer sold at the bank counter. The credit counter has moved to the bicycle store, where youngsters are urged to ‘finance’ their scooter with a loan. The credit counter has moved to the TV store, where young people are promised great deals if they apply for a comfort card. The comfort card is a loan, but this fact is carefully hidden. Instead of using words like debt, loan, or credit, the providers of the comfort card say they are ‘specialists in consumer finance’. The credit counter has moved to mobile phone stores that offer ‘free smartphones’. It is easy to forget that the ‘free’ smartphone is not free, but a loan included in the monthly subscription rate. The credit counter has also moved to the internet and our mobile phones and has become part of our living room, as mail order company Wehkamp shows us:

This page advertises extra cash withdrawl together with a purchase in the online department store Wehkamp.nl, one of the biggest webshops in the Netherlands, click for full page.

Youth in debt

The NIBUD reveals some disturbing findings on young people and debt. In 2007, 7% of people between ages 18 and 25 applied for professional debt counselling (schuldhulpverlening). Four years later, in 2011, this had nearly doubled to 12%. Within just a generation consumer credit has become a tremendous problem for young people . Could these crippling debts, which can run up to €30,000, be a result of the new credit counter? Could it be the hidden practices taking place in phone stores, electronics stores, and internet sites that cause youth debts to grow? It is common to blame the youngsters themselves for taking out loans, to say that they do not behave rationally or that their decisions are the result of immature brains. I am not disputing that people make bad decisions, and am quite willing to accept that this is partly due to cognitive processes. But that does not explain the increase of young-consumer debt. After all, previous generations had more or less the same brain but did not end up with huge amounts of debts. And youngsters, like all people, have always made some poor decisions, but those decisions did not cause one out of eight to request professional debt counselling.

We need your help

Anecdotal evidence suggests that there are many immoral and sometimes even illegal practices taking place at the new credit counter; that kids aged 14 can easily pretend they are 18 and take out consumer credit, without a thorough check by the credit supplier; that the providers of credit deceive youngsters by lying about the interest rates that they have to pay, or by simply hiding the fees and the penalties for missed instalments. In order to do something about the ever-growing indebtedness of the youth, it is crucial to know more about these practices. What happens when you walk into a store, whether online or offline, and want to purchase something? Are young people talked into buying on credit and how does this work in practice? We need your help to find out more about this, so if you have any experience with the new face of young-consumer credit, please contact me by sending an e-mail in English or Dutch to ebaehre@fsw.leidenuniv.nl. Your information will be treated with the utmost confidentiality.

Who are ‘we’?

This project was initiated by the No-academy and het instituut. We are a team of three artists (Saskia Janssen, Jonmar van Vlijmen and Ronald Boer) and three scholars from Leiden University (Erik Bähre, Tazuko van Berkel, and Nikkie Buskermolen). Together we try to find new approaches to the debt crisis among youngsters. See this document (in Dutch) for more information on the project.