'Consumer champion' takes on big price-comparison websites

TEN years ago, John Dobson and his business partner, Mike Green, approached Skipton Building Society with a simple but ambitious plan. They wanted to create Britain's third credit reference agency and a rival to the giants, Experian and Equifax.

Mr Dobson told John Goodfellow, then Skipton's chief executive, that the project would cost 12m and take three years to complete.

In the event, it took a little longer and cost a bit more.

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But six years and 40m later, Callcredit was a major force in the market.

"We got there in the end and ended up with a valuable business," said Mr Dobson.

He sold his shares in April 2009, a few months before Skipton Building Society sold the whole business to a private equity firm, Vitruvian Partners, in a deal worth 110m.

Instead of settling into retirement, the businessman – who turns 60 this weekend – has used his industry experience and contacts to launch a new company to take on price-comparison websites such as GoCompare and Moneysupermarket.

Credit Jungle runs credit checks on consumers before matching them with suitable lenders. Mr Dobson described Credit Jungle as a "consumer champion" which tries to get people the best financial service for the best rate.

He said: "We are trying to educate consumers about the niceties of how credit works and how they can best position themselves to be able to apply to the best lender for them."

On some price comparison websites, applicants see a loan with an annual percentage rate of seven per cent, but after the application process, the lender offers them an APR of 16 per cent, which can result in "rate rage", said Mr Dobson.

He added: "Often, a market-leading rate is advertised but only those with pristine credit profiles qualify for it. In the long run, applications for such products from those with average credit scores only serve to negatively affect their credit ratings due to the phenomenon of credit search footprints."

At Credit Jungle, the company's software carries out a full assessment of the applicant's financial history and afterwards chooses the most appropriate lender based on that information. The information is then transmitted to the lender for a final check.

Mr Dobson said the process manages the expectation of the consumer: "It's levelling and being honest with them, telling them what they realistically can expect."

Credit Jungle's software, which was developed in-house, uses the same scorecard technology and policy rules as lenders, he added.

Three years on from the credit crunch, cheap money remains scarce for many borrowers. The market for lending is split into four sectors – superprime, prime, near prime and subprime.

Very few lenders are offering unsecured loans and those

that do come with interest rates of 30-40 per cent, said Mr Dobson.

"The vast majority of people who apply for an unsecured loan get turned down. We then engage with the consumer because we know their circumstances.

"If they are a homeowner, would they like to consider a secured loan? If they can't get any loan, we pass them out to a debt-management partner."

He added: "We get our fees from the lenders. The majority of our fee income comes from completed loans or completed service. It's in our interest to make sure the consumer gets what they are looking for, otherwise we don't get paid."

Credit Jungle went live in April. Mr Dobson and his partners have invested 250,000-300,000 in the business. Their short-term plan is to consolidate the model in Yorkshire and use it as a platform to roll it out nationally.

It has no third-party shareholders. It has four direct lenders and relationships with three brokers, who in turn have relationships with most of the other main lenders.

Mr Dobson said: "Whenever we show the system to lenders, they absolutely love it because it is ticking all their boxes. Lenders looking for business buy leads and have to put them through a process.

"We are not about massive volume – we are about quality and accurate information. They get a better return on investment."


The challenge for Credit Jungle is visibility. "It's a bit like David and Goliath," said John Dobson, the chief executive.

"We are competing against Moneysupermarket and GoCompare, which are spending multiple millions of pounds on marketing," he added.

The company is targeting the mass market and has so far received about 2,500 applications. "Our target for the next 12 months, in our business plan, is for 65,000 applications. We would like to get 100,000."

Credit Jungle does not offer payment protection insurance because it has "significant negative connotations", said Mr Dobson. Hundreds of thousands of borrowers have been missold PPI by unscrupulous lenders.