26th February: Financial Services

Chair: Prof. Christopher Peterson, S.J. Quinney College of LAw, University of Utah, (USA), Transnational Consumer Debt Collection

Prof. Christopher Peterson, S.J. Quinney College of Law, University of Utah, USA: Transnational Consumer Debt Collection:-

The speaker started by quoting from Adam Smith’s book, The Wealth of Nations; It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The taylor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a taylor…What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the product of our own industry, employed in a way in which we have some advantage. So, if a foreign country can collect our debts better than we ourselves can, better to outsource them with some part of the product of our own industry, employed in a way in which we have some advantage. The basic premise of his paper was therefore to see how this was true or wasn’t and why.
The speaker spoke of how debt collection practices have great potential for consumer abuse such as harassment and the psychology of failure, over-charging, reputational captivity, identity theft, “Zombie” debts which keep coming back like zombies and issues of suicide.
He gave the example of how with millions of people fluent with English in India, in particular, has lead to providing product support, reservations and marketing for companies in the US, Canada, Australia, Ireland and UK. Indian companies are also providing consumer debt collection services for creditors in post-industrial countries.
He concluded by recommending that policy makers should anticipate that financial predators from both developed and developing countries are likely to attempt to exploit the various regulatory weaknesses that exist.

Prof. Jenny Hamilton, University of Strathclyde: Choice, information and education–the illusion of consumer empowerment in financial services:-

Talking about the explosion of the number of retail financial products designed by the industry for the mass retail market in the UK, it is not co-incidental but in response to the government desire to structure its public finances so as to reduce or withdraw from communitarian welfare provision. At the same time, social and familial structures mean that citizens are expected to make individual and private provision for their retirement and elderly care through market mechanism. The citizen has now become the consumer of financial services.
Various regulations have embarked on campaigns to improve the financial literacy and education of consumers in relation to savings, investment and debt. Here, the speaker posed the question of- Why, in the retail financial sector, information disclosure and financial education and capability regimes have not produced the anticipated benefits for consumers and why, despite continued consumer detriment, is there continued support for unfettered consumer choice?
The speaker suggests that the reason that information disclosure and financial literacy and education campaigns have produced only limited benefits for individual consumers of financial products and services, and in some cases the effects have been detrimental, while research into the effect of choice suggests that too much choice can be debilitating rather than liberating.
She concludes by laying emphasis on membership of a community rather than freedom of the individual, that doesn’t necessarily centre on choice as expressed through markets, and where outcomes don’t depend on possessing the ‘calculating framework’ of the ‘rational consumer’.
Rapporteur: Disket Angmo
IInd Year
NALSAR University of Law
Hyderabad, India.

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