How to Deal with Mail Order Catalogue Debt

Financial Problems and Unpaid Debts

Nov 22, 2008
Asa Ghaffar

Dealing With Debt - http://media.photobucket.com/image/debt/Manicmorga

Mail order catalogue debt is similar to credit card debt in the sense that it is hard to pay off. Find a debt solution to become free from debt today.

Customers buy items from a catalogue and typically spread the cost of payment over a 20 to 40 week period. The problem is that a lot can happen in this timeframe so spending too much on catalogue purchases can lead to personal debt problems and a bad credit history.

Regulations

Money owed to catalogue companies is normally regulated by the Consumer Credit Act 1974. The exceptions are when less than 5 payments are required in a 12 month period or the credit extended was never greater than £50. A requirement exists that the credit agreement is signed by both the borrower and the lender.

Unenforceable Catalogue Debt - Agreements Signed Prior to 6th April 2007

This is a regulated agreement so, if the lender is unable to supply the borrower with a copy of the credit agreement, it may be an unenforceable catalogue debt.

Writing to the lender requesting a copy of the agreement along with a cheque for £1 obligates them to provide this information to the borrower. When requesting a copy, also ask for the following as it may prove useful during debt counselling sessions:

A statement of account.
Details of any payments made and the present outstanding balance.
Details of any further amount due to be paid.
Details of goods ordered.
A copy of the initial signed agreement.

There are also other reasons to write off debt if the agreement existed prior to 6th April 2007 and doesn't comply with certain prescribed terms. Potential examples are where the rate of APR isn't stated or the agreement isn't signed.

Tribunal Decisions and the Financial Ombudsman - Agreements Signed After the 6th April 2007

All agreements after the 6th April 2007 are regulated by the Consumer Credit Act 2006. Credit help is available to those with debt problems as a result of unfair agreements, but this is decided by the Financial Ombudsman at tribunal.

Debt Solutions

Ask the lender for a copy of the credit agreement. If the lender is unable to provide this, they won't be able to enforce it at the County Court. This could result in the borrower being able to write-off debt. The provision of an unsigned 'true copy' will not assist the lender.
Send the lender a copy of incomes and expenditures and offer a token payment based on affordability. It is advisable to get debt counselling as they will be able to assist with this process.
Pursue a debt-free plan, such as a debt management plan. This will enable a borrower with several forms of credit to put all debts under one roof.

No matter how isolated having a debt problem makes you feel, there are thousands of people in the same position. Should the agreement be legally compliant, there are other debt-free solutions that could help. Depending on how much money is owed, a debt management plan or Individual Voluntary Arrangement, could be used to clear unsecured debt more quickly.