Money for nothing?

UK price comparison Web site moneysupermarket.com is reporting on an experiment where representatives from the company, placed on busy streets in London and Manchester, offered passers-by a free £5 note.

One moneysupermarket rep was placed on the very busy Tottenham Court Road in London on Wednesday, while the other was in the Deansgate area of Manchester. Each wore a sandwich board saying: "If you ask me for a £5 note you can have one".

Despite encountering over 1800 people, moneysupermarket says only 28 passers took up the offer of a free fiver. Just 1.2 per cent of people took advantage of the offer in London. This figure increased to 3.1 per cent on the streets of Manchester.

In a statement moneysupermarket claims this result shows "the full extent of Britain's financial inertia".

"The exercise was designed to illustrate that, credit crunch or no credit crunch, Brits are unwilling to take even the simplest steps to improve their financial situation," says the statement.

When asked why they didn't take up the offer 60% of people said they suspected a catch or trick. Around 20% said they would simply not believe the offer was real, while just over one in ten people said they would feel too embarrassed and three per cent of people said that £5 wasn't worth the effort.

"This exercise reveals a fundamental inertia which is stopping people from making sensible financial decisions," says Tim Moss, head of loans and debt at moneysupermarket.com. "This was a completely genuine, no strings attached offer. People simply had to approach the sandwich board wearer and ask for a fiver. If more than 98% of the people who passed by couldn't be bothered to do that, it raises some interesting questions about what needs to be done to persuade people to make an effort to improve their financial position." 

This stunt seems a bad attempt by moneysupermarket to use a whacky experiment to make a serious point about people taking steps to improve their financial situation.

It's unfair to say that because people are cautious about approaching a stranger offering cash they are somehow too lazy or not bothered about their financial situation. In fact the moneysupermarket experiment shows that most people have the more realistic, cautious view that you don’t get money for nothing and if you do there’s usually always a catch.

However, saying this, I was reminded by this research of the incident in Hull earlier this year when hundreds of people flocked to a faulty Payzone ATM after it started dispensing twice the amount of cash requested. In fact police officers were called in to the guard the cash machine and stop people attempting to withdraw money from the unit, which had been filled up incorrectly.

There was clearly no "intertia" or laziness on display by customers there, or in Belfast last year when a First Trust ATM in Belfast began providing double the amount of cash requested.

It is not clear if the customers in Hull or Belfast profited from these incidents, or if they were all tracked down and made to re-pay the money. But in a similar case involving a Royal Bank of Scotland (RBS) ATM in Bristol, the bank made it clear that they had a record of everyone who had made withdrawals at the unit and any discrepancies would be followed up.