Questions of Cash: November 2015

Q. My niece came to me in the summer of last year in a distressed state.  She had accumulated a debt of £2,983 with online catalogue company  My niece had failed to recognise that the deferred payment terms would one day catch up with her.  By last summer the potential debt repayment would amount to half her monthly pay.  I settled the debt for her and she is repaying me monthly.  I wanted to find out how the debt had accumulated and was aghast that the interest and insurance charges seemed punitive.  I asked my niece why she had taken out insurance, to which she said “I didn’t know I had”.  I wondered whether she had to opt out from the insurance policy, which I understand is now frowned upon and might lead to a claim for PPI mis-selling.  I wrote to Very in August 2014, enclosing a cheque for the costs of providing the account history.  The cheque was cashed immediately.  My niece received a reply acknowledging receipt of my letter.  I did not receive a response, so I wrote again in November last year.  My niece and I have still not heard anything more.  LC, Scotland.

A. We also had difficulty in obtaining a full response from, which is part of Shop Direct.  Happily, Shop Direct has now fully investigated the matter.  We asked Shop Direct to look into its failure to respond to your enquiry and whether the PPI policy had been mis-sold.  A spokesman for Shop Direct says: “We can confirm that we have now completed our investigations into the circumstances of [the reader’s niece’s] complaint and have found that there have been a number of service failings. As a consequence Shop Direct will now be making a payment to [the reader’s niece] which includes any amount due to restore [her] to the financial position she would have been in had these service failings not occurred.”  Shop Direct also apologises for the delays in handling the queries and complaint.  “We are now reviewing the specific circumstances of this case to ensure that in the future our usual high levels of customer service are maintained,” says the spokesman.  You have provided us with a copy of the letter sent to your niece.  It has refunded your niece with a total of £1,816.40, comprising £995.35 for PPI premiums paid; £547.27 interest charged on the debt related to these premiums; £87.00 for related losses; £152.23 interest due to you at 8%; and £65.00 for the refund of service guarantees.  The payment is subject to taxation of £30.45.

Q. I have had great difficulty in trying to transfer my pension pot from Phoenix to my SSAS (Small Self Administered Scheme).  The new law is being interpreted by the financial sector to justify huge fees for unnecessary financial advice.  The law is supposed to encourage the use of financial advisors where they need it – not make it obligatory.  PA, Oxfordshire.

A. The Phoenix Group has confirmed to us its understanding of the legal position – that you must seek independent financial advice to enable it to make the transfer.  Phoenix’s spokeswoman explains: “We can understand [the reader’s] frustrations, but at the time that he requested his forms to transfer there was not a requirement for him to seek independent financial advice.  At the point that we received [the reader’s] completed forms, the DWP [Department for Work and Pensions] and FCA [Financial Conduct Authority] requirements regarding independent financial advice had changed. [The reader] holds pension rights defined by the legislation and FCA as ‘Safeguarded Benefits’, which means that we require evidence that  financial advice has been received to ensure that customers are fully aware of the guarantees that they hold and the long term consequences of losing them. The legislation only requires us to confirm that advice has been received; we do not need details of the advice itself.” Nor is it sufficient, adds Phoenix, to merely state that you have taken financial advice.  “[The reader] does need to show evidence that he has sought advice, by way of a signed form from the adviser, but not that the adviser recommends he takes the cash rather than the guaranteed annuity rate,” confirms the spokeswoman. “These are the obligations given by the DWP and FCA which we have to abide by.”  A spokesman for DWP confirmed: “Members of any pension scheme with a guarantee are required by law to seek independent advice before transferring any fund valued at over £30,000.” This requirement is to safeguard individuals and their pensions, he said.

Q. At the end of August I arranged with a local company, Heritage Plastics, to do some rendering on our house.  I negotiated a ‘special price’ of £864, on condition that an advertising board was placed on the house.  We were given an installation date of 10 September, but no one turned up.  I phoned and was told that I had been given an underestimate and that the job could not be undertaken at the quoted price.  I was not offered an alternative quote.  I asked for the refund of my £90 deposit, but was told it was non-refundable.  I had not been told this before.  I spoke to Citizens Advice, which told me that it is a legal requirement to tell customers if a deposit is non-refundable.  Since then my phone calls and letters have gone unanswered.  Citizens Advice has referred this to trading standards officers, who say the deposit should be refunded, but that I need to take legal action to recover this.  I fear that legal action would be expensive.  DL, Worcester.

A. Within an hour of contacting Heritage Plastics we received a response – as did you – advising that a cheque had previously been posted to you refunding the deposit, but had apparently been delayed in the post.  An electronic payment was processed to you the same day.  Incidentally, taking small claims court action is both cheap and easy and should not intimidate consumers who are owed money.

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