‘I’d be willing to do time’: What people deep in the red really think of debt and debt collectors

Sunday, 2 February 2025

“I’d be willing to do time,” the woman said. “I’d be willing to do that than have to cope with the stress.”

The weight of a debt can lie very heavy on the shoulders of the debtor, so heavily, some would even be willing to do some time in prison to wipe their slates clean.

The woman was speaking at a focus group being run by DebtManagers, a company that buys overdue debts from the likes of finance companies, banks, power and telecoms companies, and then tries to collect them.

I was a fly on the wall at the four-hour Friday morning meeting earlier this month at the invitation of Debt Managers’ general manager, Mark Francis, and the tolerance of the people participating.

I’d met Francis three days earlier in a pub in Auckland to talk about his campaign to get the government to license debt collectors, and set minimum standards for the industry.

He told me DebtManagers was running the focus groups at its Avondale offices in a bid to become a more effective and more humane debt collector and wondered whether I would like to attend one.

I jumped at the chance to hear a dozen people speak in depth about their experiences with debt collectors. I could learn. It would be an interesting way to pass a morning.

For the people taking part it was a nerve-racking experience.

“I was shaking in the Uber,” one confided. “I was really scared because I knew where it was taking me.”

Debt collectors, even ones that a debtor is currently making payments to, are frightening organisations with power to make debtors’ lives uncomfortable.

The participants were offered koha for being there. They were all, for different reasons, free from work on Friday morning: unemployment, retirement, serious illness, a back injury, school-age children.

Research shows mental health suffers when people find themselves in hardship as a result of having debts they are struggling to pay.

“You’ve got to stay positive. It’s not easy. You have your ups and downs,” one man told the focus group facilitator. “Sometimes it’s made me suicidal.”

The facilitator is a charismatic, softly-spoken man who strikes up an easy rapport with the group. He is heavily-muscled, and tattooed. He’s a former conditioning coach for a professional rugby league team. He is a debt collector, and was back in the rough old days before companies became interested in socialresponsibility.

There was a universal dislike in the focus group for debt collection companies that bombard people with multiple calls, texts and emails, that work off scripts, and do not seem to see the people they are chasing as people.

“They don’t care if your life is in the balance when you are on the phone,” said the man who confided having had suicidal thoughts.

There are no professional conduct standards for debt collectors. Several decades of pleas from civil groups like Fincap, Christians Against Poverty and the Salvation Army have gone unheeded by Labour-led and National-led governments alike.

It becomes clear many of the members of the focus group have debts with multiple debt collectors. They do not speak fondly of Baycorp, or Debtworks, two of the largest.

They wanted to be seen, and treated as people, not as numbers on a spreadsheet.

They felt isolated. Most said they did not talk to others about their debts. They did not want family to use it against them. They felt shame. One had only told her pastor.

“It’s too personal,” one said.

But it was clear all were in desperate need of empathy and camaraderie.

At lunch, they formed a support group, took each others’ numbers. They felt safe in each others’ company.

“When you share it, something seems to come off you,” one woman said.

What made them want to engage with debt collectors, to start paying off their debts?

“I think it was coming to my door,” one said.

DebtManagers has field operatives that go door-knocking to try to get people whose debt it has bought to agree to a payment plan. They are often big men, some ex-policemen. They dress in black uniforms. Their appearance can be very alarming.

“I was terrified because he had the vest on,” said one women.

That’s a black stab-proof vest. The facilitator explained the vests were for safety. During his field work, he’d been hit twice with a hammer, punched, and had a machete waved in his face. Nobody had tried to stab him.

But, the woman said, the field operative was nice. She could eyeball him, and judge whether he cared at all for her as a person.

That mattered to the group. They wanted smiles, “but no fake smiles”.

They liked real conversations with debt collectors, so they could “hear them out, and hear that they’re hearing me.”

Several people were Māori. They wanted to sense manaakitangi. They were not alone in feeling a cultural chasm with debt collectors. The Pākeha, and other non-Māori focus group participants, felt it too. They were humans. Most debt collectors treated them as if they weren’t.

They were asked to critique DebtManagers’ letters and emails. They thought they lacked heart and humanity. They did not connect. They were especially difficult for dyslexics, said one woman who had dyslexia.

The focus group members admitted they could be slippery, and hard to contact, especially when they felt they were being harassed, or tricked.

They did not answer calls that came up as “private” on their phones. They used apps to check who callers were. They hated automated calling systems that rang their phone and then demanded they wait until a call centre operative was free.

Some did not read mail. It engendered fear in them. “I don’t know how much I owe,” one admitted.

Some just stopped paying when things got tough. “I stopped paying my debt once because I wanted to buy a heater,” one admitted.

They also do not have a single-minded dedication to paying off their debts. They want to live a bit too. At lunch, deals are struck to have nails done for far less than is charged in mall nail salons.

It’s not just multiple private debts that people have, and are being chased for.

Financial mentors report people in trouble with debt almost universally have debts to government.

In 2023 Fincap, the umbrella organisation for budget mentors, reported the median debt to government of people seeking mentors’ help was $1619, up from $1521 the year before. They also reported many people not getting all the benefits they were entitled to.

Just as debt collectors have different ways of chasing debts, Fincap noted: “There are many complexities and inconsistencies in the way government departments create and collect debt.”

And on the end of those inconsistencies are the people in financial turmoil.

It can be very stressful having to deal with multiple debts. “I wish there was just one big debt,” one man said.

Where people do not engage with debt collectors, they can find courts imposing attachment orders on them, diverting a portion of their wages, or benefits, to pay off their debts. DebtManagers is a large user of attachment orders.

How did the people in the focus group get into trouble with debt?

“Trying to live a modern lifestyle”.

“Benefits not enough.”

Accident and illness were among the reasons.

Housing and food cost too much. Incomes weren’t high enough.

That matched Stats NZ’s Wellness data from 2023. It showed 23% of people in households with income of $30,000 or less, and 16% of people from households with incomes of $30,001 to $70,000, said they didn’t have enough to get by on. In both of those income brackets, 36% said they had “only just enough”.

If they suffered a shock like a job loss, or serious illness, debt and hardship beckoned.

“Enough” depends on many factors, including people’s financial skills and circumstances, like whether they own a home, have children, or have an addiction.

Stats NZ found 7% of people in households with incomes of $150,000 or more claiming it was not enough to get by on.

But debts could also be a legacy of the recklessness and ill-judged behaviour of youth. Having the latest phone was important to young people, one said. There were myths like the groundless belief that unpaid debts were wiped after seven years. One admitted that when she was young, she had bought things using debt, them immediately selling them for the cash.

Budget mentors could help people budget, and pay off their debts. DebtManagers, which is now expanding into Australia, had just hired one to work with the people whose debts it bought.

One rated mentors highly. Some distrusted them. One feared losing autonomy, and being told what to spend her money on. They feared being told to go bankrupt.

If they could change one thing about this country, what would it be?

“Our government.”

“Food prices.”

“The health system.”

“My mindset”.

That last was from a person aspiring to be a policeman. Would his debts stop him from becoming a policeman, he asked me in the tea break? A lot of employers were using credit checks to check on job applicants.

Some, but not all of the focus group people had hopes for a better future.

One woman had been accepted to study law at university after fighting an unreasonable landlord and winning.

One asked DebtManagers for a job.

Francis said she’d not be the first “client” to join the company.

But several expected to never get out of debt, including the superannuitant, and the man who had had thoughts of self-harm. Debt had them for life.