Reports that Goldman Sachs backed Neyber have called in the administrators may come as a shock to many, but I can’t say that I’m surprised.  I am surprised that it’s happened so quickly, but the development does give me hope.

Neyber talks a good game, has a decent website, and marketed heavily.  Attending many employee benefits and wellbeing conferences as I do, I could always count on them to have the biggest stand, entertaining wary conference goers and providing an alternative to the coffee-like substance usually found in conference venues.

Sold as an employee benefit at “no cost” to the employer, Neyber led with a workplace financial education offer doubling as a lead generator for loans to employees.  It’s hard not to be supportive of any effort aimed at building financial capability, but when that effort is really a front for selling loans it just doesn’t feel right. I was really surprised when I signed up to Neyber and never once received a prompt to utilise their financial education tools but, like clockwork each week, was offered a loan. These guys were particularly successful within the NHS other public sector bodies who often struggle to find budgets for employee benefits but want to provide much needed support to those who serve us each day.  I’ve yet to meet a nurse who said they needed a loan to improve their financial wellbeing, but maybe the HR professionals who agreed to let these guys into organisations up and down the country have had different conversations?

It was even more concerning to see Neyber publishing research titled ‘The DNA of Financial Wellbeing’ and then watch the Money Advice Service (now called the Money and Pensions Service) inviting them to attend events and take a seat on the now defunct Workplace Steering Group.  Should government bodies be validating or promoting loans offered by a single lender? They are, after all, just another lender. Yes, they may have offered lower interest rates than many of the alternatives out there or even provided loans to a few people who could not access them elsewhere, but then is another loan what these people really need?

Having experience with salary linked products in my banking career there is also always a question of how these products make consumers feel.  Initially I’m sure most people felt happy or relieved at the idea they had consolidated their debts or were able to take a holiday; 2 years later, however, after a disagreement with a boss or no longer enjoying their job, did these people feel like hostages?  Of course, the loan terms do not force them to stay with their employer, but do people realise that and how was it disclosed to them? It’s also worth recognising that any positive financial wellbeing resulting from a loan is often short lived and rarely still a positive 2 years later when you’re making those monthly repayments.

In my opinion, Neyber and their loan peddling peers in the industry have never been interested in financial wellbeing.  They are interested in profit and using the idea of financial wellbeing as a way to market their products. A recent video showing the CEO of Neyber telling his team they were only interested in selling loans really makes this point.  The way he spoke about their work and customers makes me wonder if the regulator shouldn’t be taking a look at them for management and culture issues?

Like personal wellness, financial wellbeing is a lifelong pursuit which isn’t always easy and there’s no silver bullet, but I would like to see us all agree that we should focus our efforts on changing behaviour and enabling consumers instead of putting them further in debt.

If recent reports are correct, it looks like Salary Finance may be interested in buying up the loans from Neyber.  While it’s good that consumers may get some certainty from this, and maybe some of the employees will be spared from redundancy, it’s just more of the same until HR Professionals realise that debt is not the path to financial wellbeing and there’s no such thing as a ‘free’ employee benefit.

Erik Porter, Founder & CEO at Cheddr

Erik Porter