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Paying for summer long after the sun has set

27 October 2022

The summer is firmly behind us and for many it is a distant memory, and we are now focussing on events like Halloween, bonfire night and Christmas. But for some there will be a constant reminder of the summer each payday when huge chunks of their salary are eaten up by paying off their holidays, leaving little money for the rest of the month, and the thought of affording Christmas turns in to the nightmare before Christmas.

Amadeus recently commissioned research with 4500 consumers in the USA, UK, Germany, France and Singapore and found that ¾ of respondents said they were more likely to choose an option like ‘buy now pay later’ to fund their travel. Just under half said they were likely to use a credit card, which I imagine was likely to have previously been a go to method for those who wanted a holiday but did not have the funds to pay and just over ¼ said they were likely to turn to pay day loans.

This research is concerning. I have seen more cases than I care to remember where individuals are spreading themselves too thin and struggle to keep their head above water. During my career tackling the insider threat, I have identified high numbers of internal fraud which were as a result of employees using cash till payday type outlets (where you would use a cheque book and guarantee card rather than apply online), of course when payday came, most of their salary was being swallowed up in repaying the debts which then meant they were left virtually penniless with another month until payday, so the vicious cycle would start again and they would borrow more to get themselves through the month and because that was before the Financial Conduct Authority regulated Payday loan companies, APRs could reach a huge 5853%. Occasionally some employees could see no way out of the vicious cycle and so they had the motivation to steal from their employer in an attempt to repay their debts. The way that payday loans work has evolved over the years, where you no longer require a cheque book and a cheque guarantee card to obtain funds, you can now apply for a payday loan from anywhere at any time at the touch of a button, which can mean that they are even more tempting for those who see themselves short before payday.

Buy now pay later has become an increasingly common offering from UK retailers over recent months. You can now even buy a takeaway and pay for it over several months – I’m not sure any takeaway would be so amazing that I would be happy to still be paying for it several months later. The Guardian recently reported that one third of UK buy now pay later users said that repayments on the loans had become unmanageable, with users of the service paying off an average of 4.8 purchases per person. The research also identified that for those retailers that offer this service, it was expected to equate to 25% of their sales for the year. The temptation of being able to have what you want without saving can be too tempting for some and they end up financing most of their life through it, from outfits to food.

So, with the cost-of-living crisis underway, this can mean that employees could be even more tempted to use such services and whilst employers may not see that they have a responsibility to the financial wellbeing of employees in the same way that they support mental wellbeing, they absolutely should be looking closely at this area. Here are some tips that you can use to ensure that you are supporting employees.

Here are some ways that you can support your employees:

  • Agree as an organisation what you can do to support employees who are in financial difficulty. It does not have to be monetary; it could be something as simple as sitting down with a struggling employee and going through their finances to see where they can save money. You could even consider proactively offering company-wide Financial Wellbeing sessions as some employees may feel uncomfortable asking for support.
  • Make sure that employees are aware of current support such as Employee Assistance Programmes and where to obtain advice for problem gambling, debt helplines and more.
  • Ensure that employees are aware of local food banks. Some organisations I have spoken to have said they felt uncomfortable signposting employees to their local foodbank as it could make them feel that as an organisation they are not paying employees a high enough wage. However, you can't know every employee's situation – a partner may have lost their job, they could have debts, or they may be financially supporting family who are going through difficult times.
Posted by: Tracey Carpenter

Tracey is Cifas' Insider Threat Manager


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Katy Worobec, UK Finance’s managing director of economic crime, recently suggested that levels of bank fraud in the UK should be “considered a national security threat”.


Publication of Fraud and the Justice System – update from Mike Haley, Cifas CEO

18 October 2022

Today the Justice Committee has published its Fourth Report of Session 2022-23, ‘Fraud and the Justice System’, and I am delighted that many of the recommendations I made to the Committee on behalf of Cifas and our members have been implemented.

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Posted by: Tracey Carpenter

Tracey is Cifas' Insider Threat Manager