Keith joins Karalee on 6PR to talk WA economy and how we support our customers

00;00;00;00 - 00;00;21;02
Karalee Katsambanis
Now I'd like to turn our attention this evening to a little bit of a serious topic. We all know that there is a cost of living crisis. We hear it each and every day. But I'm wondering how your debt is changing as a result. Households with debt to repay with no liquid assets are really struggling to meet repayments.

00;00;21;13 - 00;00;30;18
Karalee Katsambanis
And I'm delighted to welcome to the program this evening, the founder and CEO of a company called Pioneer Credit, Keith John. Keith, good evening.

00;00;31;23 - 00;00;33;27
Keith John
Hi, Karalee. Lovely to be with you tonight.

00;00;34;03 - 00;00;55;29
Karalee Katsambanis
Look, thank you very much for your time. I know it's a very busy time for you. Now, look, as I just said to the listeners, you know, statistics are showing that a lot of households have started to run down their savings balances to, you know, maintain living standards. Others, you know, increasing debt levels and others are actually, you know, reducing their consumption patterns of what they do.

00;00;56;14 - 00;00;59;17
Karalee Katsambanis
Explain to me what Pioneer Credit actually does.

00;01;00;24 - 00;01;25;03
Keith John
Sure. Thanks, Karalee. So Pioneer, a service provider that specialises in what we refer to as impaired credit. And really what happens is if you get in trouble with the bank or your financier at about 180 days past due, so from the time you've missed making your regular payments, they might sell that debt and sell a portfolio of debt to someone like Pioneer.

00;01;26;17 - 00;01;50;13
Keith John
So we buy debt on a very regular basis. We've got a portfolio of about 2 billion AUD that is that is owing to us that we manage and then we work with those consumers as if they're our customers because they are our customers to work through whatever their situation might be so that they can get back to paying their commitments as they as they ordinarily would.

00;01;50;28 - 00;01;55;14
Karalee Katsambanis
And Keith, I've got you on the show tonight, because there is a Western Australian angle in this.

00;01;57;02 - 00;02;32;05
Keith John
Yeah, for sure. Look, we're based in Western Australia, so we're a very, you know, this is a very important part of the world for us as an important part of the community. We've got about 350 employees based in Perth and our portfolio represents about 10% of our investment across the country. So it's a really important part of who we are and it's a really important contribution that we make back to the economy, not just through employment but also hopefully in the service that we provide to our customers.

00;02;32;19 - 00;02;47;12
Karalee Katsambanis
So Keith, I've got to ask you, because there'll be a lot of people listening tonight that could be driving back from the office or they could be driving back and they've got a lot of issues with their debt and their interest has been piqued by our chat this evening. Why do banks sell the debt?

00;02;48;25 - 00;03;19;15
Keith John
For sure. Karalee, banks in Australia generally very, very good at lending money to people but lending them the right amount of money. That's an important distinguishment. You know, banks are about there to give you as much as possible. They're out there to give you an amount that's manageable. But through life's journey, all of us have life events. Death, divorce, sickness, might have lost your job and when those circumstances hit

00;03;20;20 - 00;03;44;29
Keith John
generally speaking, customers find it more difficult to manage their circumstances. And banks aren't an expert in that. So if they're not able to help you in the first about six months, then they might sell those portfolios of customers to someone like us, and we're expert in that. So our job and the reason why banks sell it to us is we're better at managing customers that are suffering some sort of hardship.

00;03;45;23 - 00;03;49;07
Keith John
And there's a range of reasons for that. But that's our specialisation.

00;03;49;19 - 00;04;01;25
Karalee Katsambanis
So how do you do it? So if I'm someone that, you know, that I end up on your books, so to speak, what do you do? Do you email me? Do you give me a telephone call? Do you knock on my door? What happens?

00;04;02;07 - 00;04;25;21
Keith John
Yeah. So there's a few things that happen, obviously. The first bit is the bit that we need to do to comply with the law, which is we send you out a notice. It's not a demand. It's actually a welcome to Pioneer notice and we welcome you as a customer to us. We also set out that there is money owing and that we'd like to speak to about it.

00;04;26;07 - 00;04;48;17
Keith John
But from there is really driven by the customer. So as soon as we can speak to a customer, we can start working through their circumstances. So if I give you an example, maybe a real estate agent, someone that works on commission and has fallen on hard times because there's not enough listings around, so they're not getting the regular income that they have coming in.

00;04;48;17 - 00;05;10;04
Keith John
From a banks perspective that doesn't work. They need to be paid every month. In our business, we don't have the same requirement as the bank might have and therefore we can work with that customer over time. So we would speak to that customer, Ben let’s call him, who's the real agent and say “Hey Ben, how you going? What's happening”

00;05;10;04 - 00;05;32;29
Keith John
Ben explains to us that his income is a bit up and down at the moment. And our reply to that would generally be something along the lines of, “Ben, we're really sorry to hear that. Keep in touch with us and when that situation returns to normal, then let's discuss how we might get you back on track.” That's very much about our approach to how we would deal with the customer in those sorts of circumstances.

00;05;33;09 - 00;05;57;14
Karalee Katsambanis
So let me ask you, I'm being a bit devil's advocate here. So that people end up not being contacted by Pioneer Credit, and you sound lovely. Can you explain for our listeners what are credit scores and how can people actually improve their credit score? And what can individuals do to protect themselves when, you know, in order to try and not get into the position?

00;05;58;23 - 00;06;30;29
Keith John
Yeah. So I think as a general rule, I mean, credit scores are relatively new in Australia. They've been around for four or five years now. I think a lot of people are aware of them because you can access your credit score for free using a myriad of services that are available on the Internet and what they are an assessment of your credit worthiness and from that it's how valuable are you to a lender in terms of them lending money to you and the price they would give you to pay for it.

00;06;31;14 - 00;06;45;12
Keith John
So lenders use that to work out what they would sell you, how much money they would give you, and also the price at which you might have to pay for that money, the interest rate you'd have to pay. So when you get into - sorry

00;06;45;14 - 00;06;51;22
Karalee Katsambanis
My error, I just want to say so. So, yes. So what can individuals do to actually, you know, protect themselves?

00;06;52;12 - 00;07;14;05
Keith John
Yeah. So when you get into trouble and you get into a situation where you're missing payments, which obviously is happening a lot now because of cost of living pressures and people that are impacted by interest rate. What will happen is your score will start to come down to the banks and lenders report that information to these credit bureaus and they'll start to mark your score down.

00;07;14;21 - 00;07;41;00
Keith John
There's not an incredible amount that you can do to stop your score going down, the scores rather dynamic and that's a reflection of your credit worthiness at a point in time. But there is a lot you can do to stop the stress that might be beset on you because of your circumstances. And the main thing to do is to talk to your lender or to talk to Pioneer Credit or whoever else might be working with you on your account.

00;07;42;07 - 00;08;03;02
Keith John
At the end of the day, speaking to people and actually explaining your circumstances and working through your situation is the best way to get through these instances with the least amount of stress and give yourself peace of mind that you've actually got time to resolve your situation and to get back on track.

00;08;03;02 - 00;08;24;02
Karalee Katsambanis
Because I think the important thing, Keith, that I want to get across for our listeners tonight is that, you know, if if Pioneer Credit contacts them it's not a matter of them suddenly disappearing, packing up everything in the car and completely disappearing out to Woop Woop. As you say, you're there to try and work with people, to try and get them through a very difficult situation.

00;08;24;02 - 00;08;49;16
Karalee Katsambanis
We often say on this program, we've had 30 years of relatively, you know, stable economic growth. There are situations now that that people have never faced before and never encountered. And as you said, you're there to work with people. There are solutions. People may not like the solutions to begin with, but you're there to actually work with them and get the best resolution out of a particular situation.

00;08;50;27 - 00;09;18;02
Keith John
Yeah. 100% Karalee and look very much like you've explained that the economic situation we're in, the discussion that we have across our team is that the person on the other end of the phone is you and me. You know, we all fall into trouble from time to time. We all owe too much money from time to time and all of us suffer life events, divorce is regular, death is regular, sickness is regular.

00;09;18;03 - 00;09;39;06
Keith John
So we're talking to people every day that are just like the people that we are. And I think it's a really important point to make that we're all in this together, and if we work through it, then we'll get a situation or a solution that works for everyone. Our business isn't about extracting as much money as possible from a consumer.

00;09;39;23 - 00;10;05;18
Keith John
Our business is about solving their situation. Invariably, that involves providing people time. But if we know you need time, then we can make your life better. But also you will have less stress because you know that you've got someone that's giving you that time that you need. That's one thing you don't have to worry about while you're getting over whatever it is that might be causing you some sort of disturbance at the moment.

00;10;06;15 - 00;10;15;29
Karalee Katsambanis
Keith John, you're the founder and CEO of Pioneer Credit. I want to thank you very much for being on this evening's Money News show on Radio 6PR as part of the Nine Radio Network.

00;10;16;13 - 00;10;18;01
Keith John
An absolute pleasure. Thanks, Karalee.

00;10;18;09 - 00;10;23;00
Karalee Katsambanis
And there you go, listeners. You've heard from the founder and CEO of Pioneer Credit, Keith John.