Last year, Stuff shared the story of an Auckland woman who watched her $2000 debt turn into $20,000 after struggling to pay off a loan with a short-term money lender. She'd taken on a loan that she couldn't pay back and a no-interest social lending firm Nga Tangata Microfinance had to step in to help sort out the debt.
According to the article, the short-term money lender talked to the woman in debt like she was "stupid" and many lenders operate on the assumption their clients won't understand the implications of their contracts.
Now, hoping to reduce the occurrence of New Zealanders getting into crippling debt and increase the country' financial literacy, The Commission for Financial Capability is taking on loan sharks with the help of Saatchi & Saatchi and Rush Digital, which have developed an app that puts players into the shoes of finance lenders in an effort to raise awareness of how to avoid a potentially life-long trap.
Created in response to young people being caught out by loan sharks and feeling the impact for the rest of their lives, Debt Empire puts the player on the positive side of lending so they can see what to do and what to avoid.
Players go on a quest for debt domination, which encourages them to use up to 17 different ‘trade tricks’ to make even more money. But as well as making the player richer, each trick comes with a corresponding real world tip to show the player how they can make debt work for them, not against them, in relation to their own life.
The commission’s marketing and communications group manager Glenn Martin says it’s used the latest game techniques to hook players in, making it competitive, fun and a bit of an eye-opener.
“In the game, as you’re earning millions and bankrupting innocent people in the process, you’re also learning how to avoid being sucked in yourself.”
He says credit is readily available from payday lenders, mobile shops and loan sharks and it knows it's up against some very enticing advertising.
“People tell us about morning-after regret when they struggle to repay debt. We hope this game will make people savvier about the pitfalls before they dive in.”
In a bid to make sure the lesson’s learned before people find themselves in need of instant finance, it has been designed for teachers to use it within the school curriculum from year 10 (age 14) and over. It is intended as a resource for teachers and support materials have also been created, along with a full curriculum guide.
Retirement commissioner Diane Maxwell also weighed in on the matter, saying those between the ages of 16 and 24 can do an enormous amount of damage.
“We are trying to level the playing field so young people don’t start their adult lives on the backfoot, weighed down by debt,” she says.
The app was tested by students at Henderson High School and principal Mike Purcell says before the app, there was no discussion of debt but now, there’s a huge amount of engagement and conversation.
"We can see ongoing benefits of this when they leave school.”