Debt Hacker, Salad Money and data-driven campaigning

Alan Campbell founded Debt Hacker in 2018 to assist victims of unaffordable payday lending, putting the UK’s “ethically bankrupt” unaffordable payday lending industry on “final notice” to change.

Campbell had previously fought for consumers’ rights when he launched “Scottish Power Broken Promises.” His campaign led to a cross-party group of MPs determining that the energy firm’s warranty scheme was “a fraud on the public,” stating ScottishPower’s “PowerPlan 100% Cashback guarantee was fraudulently mis-sold to customers from the outset and deceitfully covered up following the collapse.” The AAPG report.

Drawing on his business and campaigning experience, Campbell set up Debt Hacker after the notorious payday lender, Wonga, collapsed in 2018.

Campbell was concerned to learn how the company had continued to operate after the Financial Conduct Authority (FCA) found in 2014 it had lent money to many who would never be able to repay.

He researched the industry, met borrowers struggling to repay unaffordable loans, and analysed reports, including the Treasury Select Committee’s Household finances: income, saving and debt publication (26 July 2018).

It became apparent that “much of the payday lending industry had essentially been acting with reckless abandon, lending where it was not affordable at huge scale. Indeed the whole payday business model was predicated on it.” So Campbell launched Debt Hacker and published its manifesto to mobilise people power, bring the industry to book, and make it responsible so “those who have been on the sharp end of irresponsible and unaffordable payday lending will be liberated from one of the key causes of the debt cycle that so many endure.”

Since Debt Hacker launched and the FCA introduced the cap on high-cost lending, many payday lenders have gone bust or withdrawn from the market, often driven by the collective power of borrowers exercising their right to make unaffordable payday loan complaints.

Campbell also saw the need for more “social purpose” lenders because mainstream finance reliant on credit scores unfairly excludes many people from access to appropriate, fair, and affordable credit.

His family investment company was the founding social investor in Salad Holdings and its subsidiary, Salad Money, a social enterprise established in 2019 offering affordable loans to key workers. Campbell is not a director of Salad Money, which is run independently by its board of directors.

Salad Money is now the UK’s largest personal-lending community development finance institution (CDFI), uses Open Banking technology instead of credit scores to assess key workers’ affordability for a loan, giving borrowers access to affordable credit as an alternative to high-cost credit.

It has an independent oversight body to ensure it acts in applicants’ best interests and publishes a transparent annual impact report to measure performance against its social objectives. Along with one other CDFI, it pioneered a benefits calculator in the credit application journey, enabling hundreds of thousands of people to identify benefits they were due, but not claiming. Salad's leadership in this innovation was recognised by widespread media coverage and awards and encouraged other finance providers to use embedded benefits calculators. It has also given free, tailored financial education to hundreds of thousands of NHS, public sector and other key workers through its Money Mind tools.

Data-driven insights and campaigning

Salad Holdings supports access to anonymised consumer open banking data in collaborations with CDFIs, universities, and credit and debt campaigners. To provide data-driven insights only available from open banking data on which policy recommendations can be founded.

It has commissioned an independent analysis by The Credit Research Centre at the University of Edinburgh Business School into the anonymised open banking data of people who have applied for a loan from Salad Money.

The University’s reports give unique insights into the financial lives and behaviour of key workers. This rigorous research has given society an unbiased insight into the factors associated with a worrying lack of financial resilience among many NHS, public sector and other key workers who have become reliant on persistent overdrafts and high-cost credit.

For 2022’s report, the University analysed nearly 174 million bank transactions of 104,661 applicants – over ten times as many applicants as 2021’s report.

This was the largest-ever analysis of Open Banking transactions. It provided new insights into key workers’ financial resilience, use of credit and Buy Now Pay Later products, and was covered by The Guardian newspaper here.

Salad Holdings has subsequently launched reports into how inappropriate provision of credit has fuelled harmful gambling; the failings of the credit information market and credit scores; and (with other CDFIs and Responsible Finance) proposals for a “social credit score.”