08 November 2009


End My Credit Crunch explained

People have been writing to me about End My Credit Crunch (http://www.endmycreditcrunch.com) and how it works, so here's a quick explanation.

There a twitter account @uncrunch, with a supporting website at the URL above hosting banner adverts and more info.

The adverts are sold at 5c per follower per month. With 220 followers, this means that an advert for a month in the twitter account and on the website would cost $11, i.e. $11 to reach 220 followers plus be seen on the site. Compare this to www.tweetvalue.com which values twitter accounts and at the time of posting, it values the uncrunch account at $125 per tweet. We're less than a 10th of the cost, and you get two tweets and a substantial standard size banner advert too, surely excellent value - and you're helping others too.

We're assuming worst case scenario that overheads including corporation tax, VAT, hosting etc will be 50%, so that leaves 50% profit. Out of the profit I'm hoping to take 1/3 to help my family through the credit crunch (debts due to loss of job; 2 family members with terminal cancer; two children at sick kids as well, one due an operation next month; having to sell house) and give away 2/3 to help others. The others will be in 3 forms - 1: a proportion as a winnings pot for anyone following the twitter account - win for free and an incentive to follow. 2: A proportion for people who refer advertisers and 3:a proportion for charities.

If we get 1000 followers and sell 150 adverts then this would mean we'd be giving away around about 1000 * 0.05 * 150 * 50% * 2/3 or about $2,500 per month - as the number of followers goes up so does the amount we can give away. The cost for advertisers to reach people stays the same at 5c per follower.

This could easily scale up to much bigger numbers once the momentum builds, there's twitter accounts with millions of followers out there. Feedback from the press has been really positive we just need more people to get the word out and to reach more people via blogs, newspapers etc. Even Max Clifford's PR company thought it was a good story but unfortunately couldn't take it on just now. The account is being followed by lots of media companies, including The Irish Times, The Times (London) and the Los Angeles Times amongst others.

I'd like to give away $250,000 which would represent 10 months work if we get 10,000 followers and sell the advertising space. It would be disappointing all round if it was a lot less than this and a dream come true if it was more.



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04 November 2009


End my credit crunch launches

We are now live at http://www.endmycreditcrunch.com
Visit. Follow. Win.
Help me. Help charities. Help yourself.

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27 October 2009


Government adopts common sense approach to credit crunch and interest rates

It was announced today that the government would revise credit card terms including importantly stopping the unfair practice of forcing people to pay off the lowest interest rate first, leaving them on a potentially crippling high rate until the entire balance is cleared. Long recognised as unfair, I proposed this to the Department for Business last year and they rejected the idea. Here is the response received.

I'm glad to see that a year later, common sense has finally prevailed.


Dear Mr Cockburn

Thank you for your enquiry regarding the regulation of financial
services interest rates.

The Government has no plans to make regulations regarding the repayment
of loans having differing rates of interest. However, the Government
has introduced strengthened information requirements under the Consumer
Credit Act 2006. Lenders will be obliged from October 2008 to give
their customers clearer and more regular information on the state of
their credit accounts in order to help them identify potential problems
before it is too late. From October 2008, statements must also include
information about the consequences of failing to make payments or of
only making minimum repayments. In addition, lenders are already
required to provide a summary box, as part of the pre-contractual
information, giving consumers a consistent and succinct summary of the
key features of the credit card they are considering and enabling them
to compare different products more easily. The summary box includes APR
and other rates; the interest free period; interest charging
information; allocation of payments; minimum repayment; the amount of
credit; fees; charges; and default charges. Furthermore, lenders have
agreed voluntary post-contractual information guidelines for summary
boxes to be sent with monthly credit card statements. This means that
consumers will be better informed about their financial commitments and
able to check the features of their credit card on a monthly basis.

The OFT recently conducted a study which rejected the idea of forcing
lenders to move to a standard system for interest rate charging.
Instead, it recommended the establishment of a comparison website to
enable consumers to compare the costs of different credit cards based on
their likely patterns of usage and the way different providers calculate
and charge interest. FSA have agreed to host this site on their
'MoneyMadeClear' website, http://www.moneymadeclear.fsa.gov, alongside
existing price comparison functions for insurance and other products.
Furthermore, APACS, the UK trade association for payments and for
institutions that deliver payment services to customers, has set up a
website at http://www.choosingandusing.com/ to help consumers understand
how credit cards work, the factors that they should consider when making
their choice and the best ways to use their card.
I trust this response is helpful.

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03 September 2009


End My Credit Crunch campaign


The End My Credit Crunch group has now launched, please visit the group, check out what we're about and watch the group for imminent news of our launch. Free prizes, no purchase necessary and we help charities too.

many thanks


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19 July 2009


End My Credit Crunch

This post is to announce the holding page for End My Credit Crunch.

The site announcement is being made on 19th July at 19:48, exactly one month to the minute after having the idea. This moment was captured on twitter as I stood at Dublin airport.

The background is that a week or so previously I had been preparing an article for The Times following a tweet from Times Money about how the credit crunch had affected my family and the various problems with jobs, income and working extensively away from home we were having as a result.

That article was supposed to appear on 13th June but unfortunately, got knocked out by other news even though they thought the article would work really well and they felt my situation was really tough. However, such is the way of newspaper articles. Hopefully this one will get a lot more coverage :-)

So after a few days thought following that setback, I tried my hand at coming up with an innovative way of getting out of the Credit Crunch rather than having the story printed in The Times. A month later, here we are and the site behind the scenes is nearly ready.

We are now building the user base ready for a successful launch. Please visit endmycreditcrunch.com and follow us on twitter or drop me a mail on info@endmycreditcrunch. We would be particularly keen to hear from anyone wishing to advertise on this novel twitter related site, we hope to successfully monetise twitter to generate income that can be effectively shared out to good causes and people affected by the credit crunch. Our aim is to give away $250,000.

If this gets to be as popular as the Million Dollar Homepage then you will be glad you got in early. Unlike that site however, we are taking standard banner adverts 468x60 that make an impact. Also unlike that site, our aim is to give away a large portion of what we raise to help as many people as possible.

End My Credit Crunch - a British business helping charities and people world wide out of the crunch, let us uncrunch you!


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23 October 2008


Estate Agents and the no commission model

So the property market is now at the point where estate agents are selling houses with no commission charges (This is London; 20th October 2008)

Hardly news for me however, I wrote about this in the Linlithgow Gazette on 17th October and on this very blog almost 5 months ago.

How many more estate agents will go bust before they realise the commission model driven on a low number of high profit sales is no longer viable?

These days the main source of house sales is the Internet. If websites didn't run a closed shop estate agents only model, then members of the general public could sell their own homes for a tiny fraction of the present commission driven cost.

The longer that estate agents cling to the 1%+ sales commission model, the more incentive there is for some real competition from the likes of House network - commission free selling.

I should not more have to pay an estate agent several thousand pounds for picking up the phone and sending a seller my way than I should pay autotrader a commission for selling my car. Even eBay don't charge a commission for selling property.

Conventional estate agents pay attention! Time to wake up and smell the coffee.


Letter from Linlithgow Gazette 17th October 2008:

A challenge

Sir,— I have lived in Linlithgow for over seven years and during that time have seen businesses close in the High Street and seen a reduction in diversity in the High Street, including no toy shop, more sandwich shops and properties lying vacant. Coming from the other side of the argument, I worked for Tesco and was IT manager of the grocery website at their corporate HQ in Hertfordshire last year. Yet I feel that another out of town shopping centre is the last thing the town needs – I would rather have Tesco where it is than a larger supermarket that you need to get in a car to drive to.

The £10 minimum charge levied by retailers on credit cards doesn't apply at Tesco and if the small retailers don't want to alienate people they need to drop this requirement – even small retailers can use credit card clearing facilities that charge a flat amount per month (just like Tesco) rather than a per transaction fee.
My job as an e-commerce consultant takes me all over the UK. When I work in London, I see that small traders get more passing custom yet seem much more willing to capitalise on the internet to supplement their passing trade.

With online shopping continuing to rise, the efforts of the Linlithgow High Street to reach out to anyone wanting to shop on line are woeful by comparison. Even something as basic as a one page website listing the company name, address, email address, products and services and opening hours is missing from most of the High Street traders and instead people searching often find traders in Livingston or Falkirk instead – for example enter Linlithgow Plumber in Google and the first site returned says there are none.

Enter West Lothian computers and Google maps returns nothing for Linlithgow either. Most of the time entering generic search terms, for example Linlithgow pubs or Linlithgow restaurants such as tourists would use, simply results in generic listing type sites over which local businesses usually have little or no control – actually returning the site belonging to a local business or Linlithgow.com would be far more useful.

Whilst Linlithgow.com is a useful first step, in times of a credit crunch and competing with out of town shopping, the woeful presence of Linlithgow on the Internet does not help businesses reach out to new customers who would rather look online.

Indeed even those with the most developed websites, that is estate agents, now face challenges from online-only estate agents who list property for sale on the same websites and at a tiny fraction of the price charged by Linlithgow High Street agents. Even the might of Tesco.com can't tell me what's in stock at my local shop in Linlithgow.

The challenge of out of town shopping, online searching for businesses and online shopping presents a problem for businesses from local high street shops to major retail groups, and the people of Linlithgow. In difficult economic times we need to come together and do everything possible to reach as many customers as possible.
Not having an adequate Internet presence in this day and age is like not having a phone number 30 years ago.

Making Linlithgow at the heart of Silicon Glen fully connected with modern shopping trends would not only complement Cittaslow status, but would help businesses of all kinds to combat the challenges posed not only by Springfield's development but also global shopping trends.—Yours etc.,
Chartered IT Professional

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04 August 2008


UK Government big thinking. National Insurance

The present government is accused by Tony Blair of having no policies.

Here's a policy which someone who has been chancellor for 11 years should be able to sort out.

Simplify the tax system and make it accountable.

Here's an example - look at what National Insurance is for on the direct gov website.

Then use that explanation to explain why EMPLOYERS who derive only a minuscule benefit from National Insurance need to pay more NI than employees. Employers do not get the pension benefit, employers get only a tiny benefit from sick pay. Employers still have to pay the majority of maternity pay and employers get no benefit towards unemployment benefit through this tax. Indeed as a self employed person in a Ltd company, you end up paying approx 24% in National Insurance even though you CANNOT CLAIM UNEMPLOYMENT BENEFIT BETWEEN CONTRACTS because "looking for work" whilst out of work is deemed to be paid employment even though you are not being paid whilst doing it.

This nonsense is little better than the equally bureaucratic mess inherited from the Tories. I took my case in 1996 to my MP who now happens to be Chancellor of the Exchequer (i.e. Alistair Darling). This was around the time of Harriet Harman's "send my kids to private school" story:

Letter in The Herald 5-Feb-96
This was published in full as their main letter of the day
Poverty trap bound by red tape

The disproportionate publicity given to a Labour MP's decision to send her child to a grant maintained school is causing the real issues affecting millions of people to be quietly brushed aside by the Conservatives. Here is an example of a "customers" experience of the disastrous state the Welfare system is in after nearly 17 years of Tory rule. They only have themselves to blame. As a "Customer" my response is that the Welfare state is a mass of red tape and I'd like to shop elsewhere, if I could.

Last year I was made unemployed and I registered as such with the unemployment office. It turns out, that despite a 500 a month mortgage, approx. 100 a month in bills and a requirement to buy food to live, I am not eligible for any state aid. I am disqualified from receiving any unemployment because during the year 93/94 I was on the Government's Employment Training initiative and only being credited with National Insurance, not paying it. My other 7 full years of actual contributions count for nothing. I couldn't even get the Welfare State to pay my £70 train fare for an interview because the initial contract was for less than 12 months.

I am disqualified from Social Security as I live with my fiancée and she works 25 hours a week. It apparently doesn't matter that her monthly wage is the same as my mortgage. It costs about 600 a month minimum plus food for us to exist and every month we are going more overdrawn because of the lack of the welfare state. The government defines "full time employment" as 16 hours or week or over and if one of a couple is working this, the other is not eligible for social security or housing benefit no matter what their income is. This definition of "full time employment" is patently ridiculous. If I put on my job applications that I would work 16 hours full time, I'd get laughed at. If I put I'd only work 16 hours a week on my signing on card, I would not get full unemployment benefit. The Government clearly has it both ways.

The "Employment Service" fully accept this problem and numerous people at the Employment service have said "I shouldn't say this but you would be a lot better off if your fiancée gave up her job or moved out". Is it really the Conservative party which believes in "family values" which has created this appalling system - forcing people out of work or splitting up families so that they can afford to eat?

Taking the Conservative philosophy of choice to its conclusion - I believe my paying National Insurance is like obtaining an insurance policy for myself and for the benefit of others. My experience of this system is that the rules are obscure and complex. It eliminates people who need money whilst giving money to those who may be out of work but well off. I would like to opt out of this mess, as I can with a pension scheme, and pay towards a scheme which has clear, easy to understand rules which pays out when I need it. Looking at private redundancy schemes, this is what they offer.

What this country really needs though is a simple system for the unemployed and low paid of adding your income, subtracting reasonable outgoings and then paying all or some of the difference, at a level which gives a guaranteed minimum income but is an incentive to go back to work. No exclusion clauses based on one person's 16 hours work expected to fund a couple. No exclusion clauses based on what happened in the tax year years ago and no automatic benefit for the wealthy whilst genuinely poor people are trying to make ends meet.

The issues surrounding one child's schooling pale into insignificance next to the millions caught in a poverty trap by Conservative Red Tape.

So over 12 years later we still have a state system which means that people out of work can end up being disqualified from receiving any state aid whatsoever because of red tape. Zero income was the sort of thing that national insurance was supposed to eliminate so that people did not end up in poor houses. Zero income does not pay bills. Zero income fuels the credit crunch. In a credit crunch, we need an accountable and fair tax system which ensures that when someone is out of work they are entitled to a minimum benefit, just as when they are in work they are entitled to a minimum wage.

So no more paying 24% national insurance contributions and then excluding people from the very benefits that national insurance was set up to provide. Have a flat rate of NI for all. Abolish employers NI contributions and if necessary adjust the income tax rate accordingly to ensure no employees are worse off. This would result in a fairer and more open tax system. The present alternative of taking a 24% insurance premium and then refusing to pay out for the benefits of that scheme is little better than state theft.


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26 May 2008


Estate agents, time to change business model

Unsurprisingly estate agents are feeling the pain of the credit crunch, with 150 closing a week and monthly sales down from 14 to 7 properties on average. This is despite Scottish house prices continuing to rise.

The problem here is twofold. First of all with agencies closing, there is fewer competition for consumers and secondly the remaining competition will no doubt carry on with the same absurd practices which led their competitors to go bust on the hope that it won't happen to them.

When I received a quote from some local estate agents, I was alarmed that the rates they quoted of 0.75% and 1% of the sale price were at the lower end of the national average which according to this article is about 2%. Using the national average house price of £218,112 and the figures above, here's an estate agent income calculator:

1. Average house price = £218,112
2. Average estate agent commission = 2% = £4,362 commission
3. Average monthly sales = 7. Therefore average monthly income = £30,535

4 Estate agents per office average, average salary £50,000. Total wages bill approx £18,000. This means approx £12,000 per month profit to cover phone calls, office hire and so on.

Certainly in my case, advertising and other extras such as placement on websites, noticeboards and so on was paid for on top.

So what did I get for my 1% deduction on the sale price, according to the bill? "Professional charges including preparation of draft schedule, validated and printed, insertion of photo in local offices, placement on rightmove website and dealing with enquiries".

For that they get 1% of the sale price, and sole selling rights which mean:

"If missives for the sale of the property are concluded during the period in which the company has sole selling rights then the charges are payable even if the buyer was found by myself".

So basically the current estate agent model means that even if I find a buyer, they get to charge 1% of the sale price. Personally I think this is an undue benefit to the agent and as such possibly unfair (and therefore illegal and unenforceable) however the point here is that it's a huge commission when you consider the actual effort to achieve it. To sell a property for 400K for instance, there isn't a lot of actual effort the agent needs to do besides place adverts in papers and on websites and for that they get £4K+, something that I could employ a full time consultant for a week and still have spare change, yet the estate agent sits back for the calls and gets the money even if I find the buyer. Surely something wrong here.

This is essentially why so many agents are now going bust, and why so many went bust in the previous housing downturn in England in the early 90s. They are dependent on a very small number of very high profit margin sales and so they are extremely vulnerable to market fluctuations and in a quiet period, their profits can dry up very quickly indeed.

The solution naturally is to pay estate agents a proper fee. I would quite happily pay £100 to write a schedule and take photos. I would also, maybe, pay to advertise on websites although I think that the age of having to do so will pass in the next 5 years as more free listing sites emerge. I also don't mind paying to advertise in local papers if necessary or on a per viewing basis if the agent shows the house for sale. However, I object to paying £4K just for them answering the phone when I could do it myself.

So all in it should be perfectly possible to sell a house whatever its market value for a few hundred pounds + whatever extra marketing I want to pay for. The days of taking 1%, 2% of the sale price should be a thing of the past.

This of course means that estate agents have even less money coming in which means that they have to deal with a much wider customer base. Fair enough, I think that there are probably too many estate agents and if the numbers stay at their post-crash lows then this would be a good thing. By having more customers and a lower margin on each, they would overall make more money due to scale and also would be more immune to market fluctuations

e.g. selling 100 properties a month over a much wider customer base and making £500 on each means that the agent makes £50,000 per month rather than £30,000 and having the customers spread over a wider area means they are less vulnerable to local downturns. Incidentally £500 is the min fee that my agent charged, so clearly it is feasible at this level.

Am I the only one who thinks its time for a shake up in how house sales are charged?

Evidently not, see House Network. Any more like it?


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