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CATALOGUES AND BUY-NOW-PAY-LATER SCHEMES PUTTING PEOPLE INTO FINANCIAL DIFFICULTY

Published on:March 26, 2014Author:The Debt Advisor

There has been a lot of discussion in recent times regarding payday loans and the effects a payday loan can have on a borrower. However, people often overlook catalogue debts and buy now pay later schemes which are responsible for getting more people into financial difficulty.

The Citizens Advice charity revealed that it received 62,000 requests for help with catalogue debt last year compared with 61,000 for payday loan debts.

Debt charities say that these kinds of debts are often overlooked as politicians and financial regulators focus their attention on the payday loan industry.

Catalogue companies such as JD Williams, Littlewoods and Grattan allow customers to buy items on credit and pay back monthly or weekly. Interest rates vary between companies. While interest rates are far lower than those offered by payday loan companies, they are typically than most credit cards and loans. Littlewoods for example advertises an annual interest rate of 36.9% on repayments over three years.

Littlewoods said that many people cannot afford to pay for large household items outright such as beds, washing machines and other large appliances and therefore need a way to purchase them on credit.

“Customers are rigorously credit checked before opening their accounts with us and we then offer a variety of ways for them to pay, from cash to interest-free credit and buy now, pay later,” it said.

While such services are used responsibly by most people, they do have the potential to cause financial difficulty when people bite off more than they can chew.

In addition, some catalogue companies were found to be selling insurance services that the customer did not want or need. This year, Shop Direct was found to have mis-sold PPI policies to customers.

A report by the consumer group Which? also found that in some cases catalogue companies didn’t explain the terms of the credit agreement properly. For example, some companies advertised the low weekly cost of purchasing a product on credit without explaining the overall cost.

If you’re struggling with catalogue debts or any other debts there are options available to you.

The Debt Advisor can advise on all kinds of debt solutions such as Protocol Complaint Debt Management Plans (P-DMP), Individual Voluntary Arrangements (IVA) and Bankruptcy.

We are regulated by both DEMSA and DRF and we adhere to their codes and standards.

Call us today on 0800 0851 825 to speak with one of our advisors. If you’re calling from a mobile you can reach us on 0161 868 2500.