Digital interfaces and debt: Mediated decision making processes in high cost short term credit products 2016-2018

Ash, James (2019). Digital interfaces and debt: Mediated decision making processes in high cost short term credit products 2016-2018. [Data Collection]. Colchester, Essex: UK Data Service. 10.5255/UKDA-SN-853482

The HCSTC market in the UK has shown huge growth over the past five years. The cash and pay day loan market (a well publicised part of HCSTC) is now estimated to be worth two billion pounds a year (CMA, 2015). Part of the expansion of the HCSTC market is a shift in how this credit is accessed. In the case of cash and pay day loans, previously, customers would have to phone or call into a branch of a cash or pay day loan company to apply for a loan. With the rise of internet enabled devices and internet access, HCSTC companies have developed websites and mobile applications, where customers can apply through automated systems and receive decisions about the status of their loan very quickly. The ease and speed of using these systems has led to a situation in which 82% of all cash and pay day loans in the UK are applied for and approved online (Competition and Markets Authority, 2015). This project seeks to understand how the design of HCSTC websites and applications as well as the spaces and times in which these loans are applied for influence consumers decision making processes when applying for loans. Understanding the relationship between digital interfaces used to access HCSTC and decision making processes associated with these devices is important due to problematic nature of much HCSTC debt. HCSTC is problematic because it provides easy credit to those that can least afford it and is incredibly expensive, with high APR's and penalties for late payment. Indeed recent legislation has been created to regulate the financial terms of parts of the HCSTC market, such as cash and pay day loan companies. This regulation has included limits on the total APR and total cost of penalties for late payment of loans. However, no in-depth academic research has been conducted on: 1. How HCSTC websites and apps (including cash, pay day, guarantor and log book loans) are designed to shape decision making processes around taking a loan. 2. How the design of HCSTC websites and appsencourage, smooth or normalize processes of taking a loan in practice. 3. How the spaces and times where digital devices are used to access these sites and applications might impact these decision making processes in practice. This is an important omission, considering that 82% of these loans are accessed via digital interfaces (CMA, 2015). To investigate this issue, the research uses qualitative methods to study three groups. 1. Website and app designers. This part of the project will investigate the techniques involved in designing HCSTC websites and apps. Through 2 days of observation of designers at the App World and Consumer Credit conferences and 10 interviews the project will understand how designers discuss and reflect upon their own practices in relation to mobile website and app design. Through interviews with designers the project will investigate how websites are designed in an attempt to prime consumer decision making processes regarding taking a loan or buying a product. 2. Staff from debt advice charities, including The Debt Advice Foundation, Citizen's Advice Bureau and financial regulators including The Financial Conduct Authority (FCA) and Competition and Markets Authority (CMA). Through 10 interviews, this part of the project will seek to understand how members of staff from debt advice services understand the role of digital interfaces in shaping their clients practices and whether they give advice regarding the use of digital devices to their clients. 3. HCSTC website and app users in Newcastle Upon Tyne, UK. This aspect of the project will seek to understand how people experience and use HCSTC products. Through data gathered in 40 interviews the project will fill the gap in knowledge around how these interfaces influence decision making processes of customers and produce evidence-based recommendations regarding the implications of digital interface design on forms of problem debt enabled by HCSTC.

Data description (abstract)

The data comprises of qualitative semi-structured interviews with two groups. The first is individuals in the North East of England who have accessed High Cost Short Term Credit through digital interfaces such as laptops and smart phones. Discussions focus on how the design of these digital interfaces and their mobile nature influenced people's decision to access credit and how they went on to manage this debt. The second is individuals working in the debt charity and regulation sector. These interviews focused on how charities and regulators understood the role digital interfaces played in the decision making processes around accessing credit.

Data creators:
Creator Name Affiliation ORCID (as URL)
Ash James Newcastle University
Sponsors: Economic and Social Research Council
Grant reference: ES/N012666/1
Topic classification: Media, communication and language
Economics
Society and culture
Keywords: credit, debt, digital interfaces, mobile communication, mobile phones, website design
Project title: Digital Interfaces and Debt: understanding mediated decision making processes in high cost short term credit products
Grant holders: James Ash, Ben Anderson, Paul Langley
Project dates:
FromTo
1 September 201631 August 2018
Date published: 22 Nov 2019 12:55
Last modified: 22 Nov 2019 12:56

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