Here is a link to a report which has come in to the public domain about a specific group of vulnerable consumers (written by National Traveller MABS and edited by Dr. Stuart Stamp).

http://www.mabs.ie/fileadmin/user_upload/documents/Reports___Submissions/MABS_Reports_Documentation/Travellers_and_Personal_Finance.pdf

The Travelling Community is a small segment of the Irish population and one which has encountered friction when dealing with other groups and with State and private sector institutions.

A romantic rendition can be seen here: http://www.youtube.com/watch?v=5xB2m2id0q4
A slightly more realistic tale can be heard here: http://www.youtube.com/watch?v=jMKwMZWHLHs

What is covered here is of relevance to the Roma community across Europe. The concepts and the experiences may also be shared more widely among low income groups in all Societies in Europe.

In the Local Area Meetings, the question: “In your experience what needs or issues emerge for Travellers regarding financial matters?” elicited 305 responses. The responses came from representatives of 105 Traveller organisations and other community based support and service organisations including 41 MABS Offices.

Many respondents identified the same or similar issues. By collating all the responses, 50 distinct but connected issues were identified (see Appendix (i)).

Many of the same issues were raised in different Local Area Meetings. The 5 most noted issues emerged in over 30% of meetings and were also raised consistently in the focus groups. These will be examined in more detail in this chapter. The issues that appear less frequently are often interconnected with the main issues identified, and will be discussed within these broad headings as appropriate.

The core issues raised are as follows:

                Income inadequacy

                Access to financial services

                Illegal debt

                Accommodation and utility costs
                Costs of life events

 
3.1 Income inadequacy

The underlying difficulty of people not having enough resources upon which to live came up consistently in the focus groups conducted with Travellers themselves, and is at the root of many of the issues that were identified in the LAD meetings.

Declining income coupled with increasing costs combined to make managing on a social welfare payment extremely difficult, if not impossible. Although occasionally mentioned in the Local Area Meetings, income inadequacy was most evident in the focus groups where it was often referenced as a ‘fact of life’. Typical comments were: color:#363D99">

There is a lot of hardship among Travellers

You are really on your own

We survive week to week

The Society of St Vincent de Paul (SVP) was mentioned in all the focus group sessions as an actual or potential source of charitable income support. Two groups felt that the SVP could have more input in their area, whilst participants in the other 2 focus groups felt that people couldn’t live without their help:

There is a huge dependency on the Saint Vincent de Paul

Interestingly, there was a consensus that the SVP could provide its support a little differently. It was suggested that, rather than making once-off payments, SVP could structure financial support over the longer term while working with the MABS adviser and the Traveller client towards a structured payment plan. It was felt that this would be a better use of resources and could help discourage dependency:

Set up a structure so that they could pay off  the bill and move forward

The responses from some participants in the focus groups suggested that the way assessments of need are carried out vary considerably between SVP conferences and that a more standardised approach is needed

3.2 Access to (mainstream) financial services

Travellers do not use mainstream financial services to the same extent as the population as a whole as shown by previous research (Quinn and McCann, 1997; Quinn and Ní Ghabhann, 2004; Corr, 2006). The discussions in the Local Area Meetings and focus groups suggest that this remains the situation in 2011. A number of reasons for not using such services were identified during these sessions:

1. Lack of information and support

2. Customer identification requirements

3. Literacy difficulties

4. Relationship and trust issues

5. Credit union issues.

1 Lack of information and support

One of the focus groups highlighted the need for support when Travellers are trying to open bank or credit union accounts. In contrast, members of another focus group all had bank accounts (for the payment of wages), so this was not an issue for them.

The view frequently expressed was that there appears to be an assumption among service providers that the information they make available is accessible to Travellers. However, the methods used may not be suitable for Travellers with low literacy levels or with low educational attainment. This was identified in some of the Local Area Meetings.

Information distribution methods may also not be appropriate for those accustomed to using more Traveller specific services such as Traveller social workers, visiting teachers and Training and Education Centres. Thus, information may not be even reaching many Travellers. This may be compounded by the recent cutbacks in Traveller Specific Services.12

2 Customer identification requirements

Identification requirements for opening bank accounts and applying for other financial services was discussed at length. It was raised in both Local Area Meetings and in the focus groups.

This can lead to many not bothering.

It’s too time consuming

This can lead to extra expense which put people off

My brother had a valid driving licence, a passport but no utility bill in his name and this was a problem

As noted earlier, following the introduction of the Criminal Justice Act 1994, Guidance Notes for Credit Institutions were introduced which offered reasonable alternative measures to establish the identity of a person when the preferred passport and utility bill were not available.13 Such reasonable measures cover a broad range of options and, if implemented by the financial institutions, will ensure access to all. However the lack of consistency among financial institutions regarding implementing the guidance notes was evident. An example related to the ML10 Form, an alternative form of identification issued by the Garda Siochána. Respondents reported that many people do not seem to know about the ML10 form, including many Gardai and staff in mainstream financial institutions. Another example related to some financial institutions, who according to one of the focus groups, are continuing to look for letters from the local authority, even where a person is not on a “legal” site and therefore could not produce such proof of address.

3 Literacy difficulties

Literacy levels act as a barrier for Travellers accessing and using mainstream financial services. Literacy problems were raised in several Local Area Meetings, and although literacy was not an issue for one focus group, it clearly was in others where literacy levels were much lower:

Forms everywhere, even in a doctor’s office,

I can’t read them

One respondent described the paperwork involved and remarked “why bother?” The need for simple, straightforward procedures for setting up banking, saving and credit facilities was also raised as an issue.

This challenge to providers of financial services is similar to challenges faced by providers in other countries where members of minority cultures are unable to avail of services designed for the majority culture. As a response, more innovative schemes are being developed, particularly across the developing world (Napier et al., 2010). Examples of such schemes are the use of mobile phones to receive and make payments and to access basic banking facilities, the provision of micro-credit services and the extension of insurance through cash-based “off the shelf” products.

There was a consensus among respondents that more appropriate services, and user-friendly policies and procedures, could help people avail of financial services if they so wish, and could, in time, directly compete with the attraction of non-mainstream alternatives such as illegal money lending. The issues identified here point to the need for financial services that are simple to access and use, with as little associated ‘red tape’ as possible.

4 Relationship and trust issues

People’s view of banks varied. No negativity to individual staff or services was expressed, and some focus group participants felt that if you were known in an area, there was no problem:

If you’re known in town, you’re ok

However, trust of banks, in general, came up as an issue; one discussion centred on a preference to save at home at a time of recession in particular, in part through a concern that banks could take people’s money if they needed to. A fear of borrowing also came up:

Giving yourself a bigger loan to pay off

5 Credit Union issues

Credit unions, along with post offices, are viewed positively within the Traveller Community as a whole (Quinn and McCann, 1997; Stamp, Murray and Boyle, 2011). A word frequently used to describe credit unions in this study was “approachable”. Primary Health Care Workers spoke about regularly promoting the credit union to families that they work with. However, there were concerns from some regarding access, for example the case of a Traveller group housing scheme being excluded from the common bond of the local credit union.14

A difficulty in opening accounts due to the lack of a long-term permanent address and/or utility bill was also raised. Lack of information about credit unions was identified as an issue for some Travellers who may know a little about credit unions, but may be apprehensive of using their services because they do not understand the processes involved in saving or borrowing, or do not have enough information about them. One respondent noted that in their area:

Some [credit unions] still operate a ‘one day a month’ policy where new members can join This can be very off putting

Some Traveller participants, who were shareholders in their local credit unions, appeared not to be aware of other benefits of membership. There was a sense of people, in some cases, being afraid to ask, not understanding the written information provided due to a lack of literacy skills, or simply not knowing where to get information. It also seemed that some Travellers may be unaware of the Death Benefit Insurance (DBI) Scheme offered through many credit unions, and the claims procedure involved. Finally, the loan application process was often seen as being too detailed and lengthy when a fairly pressing need for credit arises; hence, the use of illegal moneylenders for immediate credit, even though people know this is considerably more expensive.

3.3 Illegal debt

This issue was frequently identified in both the Local Area Meetings and focus groups; it refers primarily to the use of illegal or unlicensed moneylenders. Moneylending is the practice of giving cash loans or supplying goods or services that are repaid at a high level of interest over a short period of time. Moneylenders are required to hold a licence from the Central Bank (formerly the Financial Regulator). Illegal or unlicensed moneylending, therefore, refers to the practice of lending money without a licence; this is a criminal offence carrying potentially severe penalties, prosecutable by the Garda Siochana. The extent of illegal or unlicensed moneylending in Ireland is unknown.

There are 46 licensed moneylending companies in Ireland at the time of writing (August 2011), and interest rates can be as high as 187% APR. Details of all licensed moneylenders and the terms within which they are licensed to trade, are available via the website of the Central Bank (http://registers.financialregulator.ie/DownloadsPage.aspx). 

Although most of the discussions focused on illegal moneylending, the use of a major licensed moneylending firm, especially at Christmas time, was discussed in one (rural) focus group. Participants were concerned that many families are finding it more difficult than before to meet repayments, following a reduction in income as a consequence of recent budgets.

Unlicensed moneylending is a criminal offence in Ireland. It has consistently been reported to be an issue within the Traveller Community and to have created enormous difficulty for many Travellers in terms of exorbitant interest rates, spiralling debt, harassment, threats and dependency (Quinn and McCann, 1997; Quinn and Ní Ghabhann, 2004).

However, for many it still appears to be the most convenient way, if not the only way, of accessing credit at a time of immediate need such as when an unforeseen event has occurred or at certain times of the year such as Christmas:

You go to an illegal person, you get that money within 24 hours

In one of the (urban) focus groups, it was felt that in that particular area, the problem was increasing. In another (rural) focus group, it was confirmed that:

This is happening…although families don’t come out and discuss it

The concern was that vulnerable families “cannot see a way out”. People use unlicensed or illegal moneylenders for various reasons. Lack of access to low cost legal credit, easy access to a moneylender who comes to the door, and a lack of paperwork are just some of these reasons (Quinn and Ní Ghabhann, 2004). Illegal moneylending can also be attractive for people who at times of emergency, grief or addiction, are unlikely to be thinking through the long-term implications of borrowing money from such a source, and who just need money quickly. An example was given of vulnerable people being targeted by illegal moneylenders at a time of bereavement:

You take that to get over the next few days

Some respondents reported the use of violent threats to extract payment. As one Traveller put it:

They’re looking for you 24/7

Linked to this were reports that illegal moneylenders, some from within the Traveller community and some from outside it, were actively targeting new estates where people are at their most vulnerable. Young adults or teenagers are also being targeted into “buying fashion on ‘tick’”.

A number of specific points were made about the practice of borrowing from illegal moneylenders. These related to:

1.     Lack of awareness,

2.     Lack of access to legal credit,

3.     Illegal moneylending and illicit drugs,

4.     Fear of breaking the silence, and 
  Ease of access.

We now look at each of these issues.

1 Lack of awareness

Some respondents felt that there was a lack of awareness among Travellers regarding the consequences of borrowing from illegal moneylenders. Respondents stated that they felt many families were unaware of the rapidly spiralling debt that is incurred through exorbitant interest rates, and at one area meeting it was remarked that:

Many [Travellers] did not realise it was illegal… it was accessible, affordable (at the time) and didn’t include external agencies

There was agreement in one focus group that there is a lack of education regarding such lending, that “people don’t understand”, are “unaware of the cost” and can be forever trapped in a lending and borrowing cycle:

I know one man who was always in debt to them and had to send his daughters onto the street to pay them off

2 Lack of access to legal credit

Lack of access to legal and affordable credit was mentioned as a reason for people resorting to the use of illegal moneylenders. The issues involved here, namely lack of information and support, customer identification requirements, literacy difficulties, together with relationship and trust concerns, have already been discussed above (3.2.).

3 Illegal moneylending and illicit drugs

Several respondents relate the increase in illegal debt to the increased use of illegal drugs. This issue has also been identified within research studies (e.g. Fountain, 2006). It was felt that fear, shame and embarrassment may prevent victims from seeking help from services such as MABS. There is a particular shame attached to the use of illegal substances and to the incurrence of illegal debt owed to the drug ‘pushers’.

In one of the focus groups, the issue of drug use was discussed in some depth and it was made clear to us that dealers are actively targeting the families, especially the wives and mothers of the person who owes the debt:

Drugs is a huge issue here…Many families are in debt to dealers and…people do not want to discuss this openly for fear of reprisals from both dealers and the extended community

4 Fear of breaking the slience

It was noted that many Travellers who are in debt to illegal moneylenders feel they cannot talk about it to others, so cannot get support to deal with it.

Fear of the consequences of “coming forward”, and of non-payment, were major concerns. Some respondents stated that some of the illegal moneylenders are themselves from the Traveller community, so the dynamic of ‘reporting’ on one’s own people is another barrier.

5 Ease of access

Respondents frequently mentioned the simplicity and privacy involved in using illegal moneylenders. Despite the many negatives, there was an understanding of why, for these reasons, a moneylender was often the chosen option for the potential borrower:

The borrower does not have to answer any questions about why they need the money or about their personal situation…it is easy to see the attractions to getting money this way

Respondents noted that access to cash through moneylenders is “easy and quick” in comparison to the various obstacles Travellers can face when trying to access mainstream credit; for example, the identification requirements of banks and credit unions discussed earlier.

One focus group contrasted the ease of accessing a loan from an illegal moneylender with the longer process required by a credit union. Thus, convenience and other considerations clearly outweighed cost in the minds of the members of this group. It is, therefore, an understandable choice for some in times of emergency.

In one focus group, members stated that illegal lending did not exist in their community and any further probing on the subject by the facilitator was met with silence. It was stated by one group member that when looking for money:

You pay for your privacy

3.4 Accommodation and utility costs

A number of key issues arose relating to accommodation and utility costs and can be identified as follows:

1.     Living in caravans

2.     Insurance costs

3.     Transition from a caravan to a house

4.     Utility Costs

5.     Pre tenancy courses
  Local Authority Rents

Respondents noted that debt issues tend to arise more frequently at times of change, such as moving from a caravan to a house, getting married or receiving an allowance or wage for the first time

1 Living in Caravans

The most frequently mentioned problem facing Travellers when living in caravans was the cost of repairs. One respondent, a representative of a link agency for Travellers, explained their perspective in writing to us as follows:

As a link agency for Travellers, we come across on a daily basis the dire conditions the majority of our clients were and still are living in. Because the council loans, that are sometimes available, are not enough to purchase a decent caravan, Travellers are accepting loans from the council that allows them to buy only sub-standard accommodation that does not out-live the lifespan of the loan. So very often, our clients are left paying for a caravan that has fallen apart long ago. The implications of this are that the family needs to borrow again, paying back two loans for two bad caravans.

Most caravans bought by instalment are not paid off by the time they need to be replaced or repaired. If the family is in rent arrears to the Local Authority for the bay, the Authority will not, we are informed, contribute to caravan repairs. Also, it was noted that Travellers have traditionally burned a caravan if a family member has died for reasons embedded deeply within Traveller culture. In such instances, the family often has no alternative but to borrow money from other sources (possibly an illegal moneylender) to replace it.

2 Insurance costs

Insurance costs were reported as ‘high’ in regard to both caravan insurance and motor insurance. Respondents noted that Travellers were often subjected to “huge quotes” for motor insurance, which is an essential expense for many Travellers, as Traveller specific accommodation is often located on the outskirts of towns:

Traveller families usually place a great importance on having a form of transport… and pay high costs for insurance

Insurance for caravans as holiday accommodation is priced as a reasonable risk, but as a primary residence, it is considered to be a high risk, and therefore costs are high. Travellers, due to both the cost and difficulty in accessing reasonable insurance, do not in the main insure the caravans they live in. Therefore, if and when a caravan needs repair or replacement, there may be no insurance to cover costs. As was commented upon in the focus groups:

Travellers find it difficult enough to get insurance for cars and vans, let alone caravans.

If you have an address on a halting site, you will be charged higher…seen as high risk

3 Transition from a caravan to a house

Travellers are increasingly being moved from caravans on halting sites into local authority and private rented houses. The transition from living in a caravan to living in a house may be difficult, and can often result in debt for many Traveller families. This issue arose in three of the four focus groups, and in nearly half of the Local Area Meetings. As one respondent explained:

Once a Traveller makes a move to settled accommodation…they are faced with excessive bills for all domestic costs plus any added costs they incur furnishing their new home: line rental, bin charges

Respondents in the focus groups felt that their historic system of managing money with cash did not work in a system that is based on deferred payment or credit.

High emotional stress and claustrophobia were mentioned by some respondents.

4 Utilities

Several respondents in the Local Area Meetings reported that when Travellers moved into housing, they were often shocked at how utility bills mounted up. Living in a house, as compared to a caravan, entails a different method of utility consumption, of measuring or controlling the use of the utilities, and of paying for utilities. For example, when living on a halting site, the family is used to paying for electricity or gas through a metering system or by buying a cylinder. Respondents pointed out that paying for fuel in this way (by “pay as you go”) makes the user very conscious of both the amount purchased and the amount used.

How Travellers use electricity is often a significant issue [especially] when they move into private rented accommodation

Travellers who had been living in a house all of their lives, were of the view that utility use by Travellers accustomed to living in caravans was contributing to high fuel bills. One example given was the “use of cooking gas for heating a room”, whilst the use of electricity can also be a concern:

We all sleep on the kitchen floor at night because it’s the only place with any heat

The main problem, which came out of the discussions, is that people not used to a continuing supply can be unaware of the extent to which costs can increase the longer appliances are used, and the higher the settings. Costs are effectively “invisible” and the resulting bills can therefore be quite a shock for many. A participant in one of the focus groups, who had previously lived in a caravan explained:

Then we had generators…and you just had to put in a few pound each week for what you use

A further point made referred to literacy levels, where people may not be able to read their bill, hence they may not be fully aware of why their bills are so high, and how they can reduce them in the future. The continuation of bills, or bills running into each other, appeared to be a distinct cause of difficulty for Travellers used to paying for a product or service outright.

They should have left us on the road we were better off…now we have problems

Travellers are used to paying in a different way

Many found the length of time between bills to be too long, given the custom of many Travellers to “budget by the day”. Most participants in one focus group had ESB easy-pay cards, but they appeared unable in some cases to understand the bills. Arrears in excess of 800 were mentioned. Again, a lack of confidence in dealing with service providers (in this case utility providers) was evident in the focus groups.

Participants in one focus group highlighted the difficulty of being faced with an array of different bills at different times and emphasised that pre-tenancy and post tenancy advice did not help much in this respect. Difficulty in adapting to new payment methods was acknowledged by group members. The problem of “poor” money management or “overspending” was mentioned in a small number of Local Area Meetings.

5 Pre-tenancy courses

The view, in summary, as expressed in the focus groups was the absence of preparation for the change:

People are put into accommodation and forgotten about

There is nobody there to listen to ya…nobody wants to help ya

In some Local Area Meetings, respondents felt there was a need for local authorities to invest more time and resources in pre-tenancy courses. it was observed that, although local authorities warn new housing tenants that additional costs can occur when living in a house, this may not be fully understood by new or prospective tenants who are unlikely to have had any previous experience of such living conditions.

Currently, National Traveller MABS provides inputs at courses of which it is made aware. These are mainly short inputs, provided as part of several information sessions that are given to the tenant whilst they are still awaiting receipt of the keys. Consequently, much of the information probably appears irrelevant from the perspective of the potential tenant. The information may, however, be more relevant once the tenant has actually experienced life in their changed surroundings.

6 Local Authority rents

Rent for Local Authority housing is somewhat more expensive than renting a bay on a halting site, and it was reported to us that private rents are often considerably more expensive than Local Authority rents, even with Rent Supplement payment.

The amount of rent charged by local authorities was a major concern for a number of respondents in one focus group, who felt that they were paying high rent for accommodation. There were some reports of housing with no heating due to breakdowns, or services that had been disconnected due to faults which were never rectified.

Problems can also arise where Travellers are faced with having to move out of local authority accommodation due to the threat of violence, ‘moving on’ being a long standing tradition of conflict management for Travellers. This may be deemed to be giving up accommodation “without just cause” and consequently Rent Supplement for alternative privately rented accommodation, likely to be the only option in the short term, may be refused.

In terms of local authority rent increases, notification may go unnoticed where a tenant has literacy difficulties. Examples were given of tenants only becoming aware they were in arrears when they applied for repairs to be carried out. In one focus group, there was a long discussion about rent arrears being sometimes allowed to accumulate, as a result of a delay in notifying the tenant that there had been an increase.

Better communication between relevant staff in local authority housing departments and Travellers would, it was suggested, address some of these difficulties. A lack of confidence when dealing with local authorities, and utility providers in general, was particularly evident in one of the focus groups; advocacy support in this regard would appear to be important.

The consequences of rent arrears can be eviction. This was discussed in one of the focus groups where a process of moving from council accommodation to the side of the road, and then being evicted from the road-side and moving back into housing was described. There was real frustration that the Local Traveller Accommodation Consultative Committee16 (LTACC) is not listening to what the issues are:

Every month, the same issues coming up, they are not being resolved

3.5 Cost of life events

A frequently identified financial issue for Travellers may be described as coping with the costs of “life events”. For the purpose of this report, life events refer to funerals, weddings, christenings, communions, and confirmations. They may be planned, as in the instance of a communion, or unplanned such as in the case of most funerals.

The issue of “perception” arose in the focus groups. In one focus group, a strong view was expressed that the settled community’s view of Traveller weddings is heavily influenced by media representation of these events and that this representation is not the reality for many. In contrast, another focus group felt that Travellers generally tend to pay a lot for life events such as first communions, christenings, weddings and funerals. In respect of the latter, one participant remarked:

It costs more to die than be born

The main reasons given for the expenses were that “you are what you have” and the importance of perception, “that what you show is what you have”. Peer pressure was an issue for this focus group whose members felt that you would be looked down on by others in their community if you did not spend a lot on these occasions. Although some people in the group felt that the spending was exorbitant, in their opinion “it was a tradition” albeit “an expensive tradition”.

Family (and in some cases community) support with finances, particularly around funeral costs, was said to be common, although some felt that families can differ in the amount of support that is given. The different views expressed in the focus groups serve to illustrate, among other things, the importance of not treating Travellers as a “homogenous group”.

Unplanned events

Debt due to unplanned events17 such as death and serious illness was mentioned in a number of the Local Area Meetings, while problems resulting from inter-family feuds were also mentioned.

When an event is sudden or unplanned, as already discussed, many Travellers have little alternative but to resort to illegal moneylenders because they do not have access to, or information about, mainstream, affordable credit options, or to savings and insurance facilities. Certain social welfare payments may not be available to help with the costs depending on the circumstances. In the case of bereavement, the lump sum Bereavement Grant is unlikely to be available to many Travellers. This is because it is a social insurance based payment, and many Travellers may have insufficient contributions to qualify, given high unemployment and self-employment rates among the Community as a whole.

Problems were also identified in relation to the claiming of Exceptional Needs Payments (ENP) from the Health Service Executive (HSE) at times of crisis19. These problems relate to people being unaware of eligibility criteria, being unwilling to claim in some cases out of embarrassment or fear of refusal, and administration issues. Information and support is clearly needed to assist Travellers in this area.

Planned events

Respondents also identified planned events such as weddings and other religious and family celebrations as giving rise to debt problems. It is recognised that it is a Traveller cultural norm to have larger and more demonstrable rituals and celebrations for major life events in comparison to settled families e.g. for weddings and christenings. However, it is important to make the distinction that it is not the events themselves that are at issue here, but rather how the associated costs are managed. As one respondent stated:

While it may seem extravagant to spend thousands on a funeral and headstone, these  are the wishes of the people. It is how they  access and manage their debts due to this that  is of concern

One focus group felt strongly that Travellers in their community did not pay substantial amounts for life events such as first communions, christenings, weddings and funerals. Participants described how they paid off the costs of clothes over a period of time, and saved for what they could. Descriptions were given of a mother’s wedding dress being used to make a christening gown or communion dress.

There was an overriding view that in order to manage costs, Travellers need to be able to more effectively utilise mainstream financial services in a way that is appropriate and sensitive to their cultural values.