ABSTRACT
We have become all too used to default. Ever since the first global recession of the twenty-first century broke towards the end of its first decade, the issue of credit default has not been far from the lips of media commentators, politicians and, sometimes, academics and the public. This is perhaps surprising. Within the credit industry, default is a largely technical term, used to refer to the moment at which a borrower is deemed to have broken the conditions of their credit agreement by not repaying a debt according to its agreed schedule. Now, however, the term has come to stand for a crucial part of contemporary social and economic life that seems to in some way have become ‘broken’. The reason for the movement into the mainstream of talk about default can, of course, be found in those moments in and around 2007 when the credit-driven origins of the ongoing economic turmoil became publicly visible. Amidst the range of factors that set in motion what was to become a global economic crisis, it was the rapidly increasing volume of defaults on sub-prime mortgages in the United States (US) that achieved particular public prominence. As many of us came to learn, these mortgages were deeply wrapped up in the global financial system. Complex financial products had been built on the promise that they would generate a financial return. When this promise turned out to be empty, a destructive chain of events was set in motion that saw the threat of default spread from individual borrowers’ mortgage products to major financial institutions, to the central banks of what had previously seemed to be financially secure, well established capitalist economies. Default was the spectre that haunted the global economy; in many ways, it still is. The response, as we now well know, has often been for governments to pour money into the ailing financial system, while subjecting much of their populations to extended periods of so-called ‘austerity’. The varied after-effects of these threatened and actual defaults – including welfare cuts, growing unemployment (and underemployment), higher costs of living, the devaluation of savings and pension portfolios and the difficulty of obtaining affordable credit – have, in many parts of the world, been compounded by a related but distinct tale of default: that of consumer credit default. This is the book’s object. More precisely, it provides an account of the wide ranging set of practices, technologies and lived experiences that come, for a variety of
reasons, to be associated and ‘attached’, to consumer credit default. These come into play when a borrower is unable, or perhaps unwilling, to continue to make payments on particular types of loan: loans that are intended to be relatively short term and that are often not tied to a particular piece of property. The most familiar of these are those associated with credit card borrowing, unsecured personal loans and forms of hire purchase (rent-to-own as it is sometimes known in the US). A large part of the book’s interest is in the calculative challenges facing borrowers and defaulters. It follows the changing calculative challenges that they confront, whether associated with moments of borrowing, or the ongoing management of debt, or being confronted by debt collectors. At the same time, it looks in at the debtor from the perspective of the collector, to try and examine in more depth the attempts that are being made by collections organisations to shape and influence debtors’ calculative practices. By exploring this encounter between debtor and debt collector, the book opens up a domain of social and economic life that not only is often seen to be highly controversial, but also is yet to be adequately understood. The empirical focus of the book is mainly on the United Kingdom (UK). However, given that the credit and collections industry is global, with its expertise flowing increasingly easily across national boundaries, there are important lessons for, and parallels to, how consumer credit default is now being managed and experienced in many other countries. I will draw out some of these connections where relevant. In doing so, the book employs a diverse assembly of material. This includes interviews with borrowers, defaulters, collectors, industry analysts and spokespersons, most of which were conducted in 2008 and 2009, but some of which took place as recently as 2014.1 In 2009 I was also able to spend some time at three large, industry-leading debt collection agencies in the UK (which I will refer to as Alpha, Beta and Delta) and to observe their operations, including listening in to collections calls and speaking to staff in a range of different positions. The book thus captures experiences and collections practices from a quite particular slice of life in default in the immediate aftermath of the global economic crisis, although many of the specific sets of practices and experiences that it documents have changed little in recent years. I will highlight both points of continuity and difference as the book progresses. This field research has also been supplemented by documentary and archival research, in particular drawing on material from both UK and US industry publications, as well as visits to major industry conferences in the UK, events that I have attended throughout the research process. This methodological diversity is in part a product of my desire to track consumer credit collection and default across the varied terrains in which it operates, as well as, more pragmatically, a product of the considerable challenges that confront researchers attempting to enter to an often quite deliberately closed-off domain. Partly these barriers are an effect of the controversies that tend to surround the practices of debt collection, as I will highlight further on.
