Missold Catalogue Credit Claims
What Are Catalogue Credit Claims?
Many UK consumers don’t realise they may have grounds for a claim if they were sold unaffordable catalogue credit. Catalogue accounts work as revolving credit facilities, similar to credit cards, where customers receive a credit limit and make monthly repayments towards their outstanding balance.
Understanding your rights regarding catalogue credit is important, particularly if you’ve experienced financial difficulties maintaining repayments or noticed your credit limit increasing despite struggling with existing debt.
How Catalogue Credit Works and Potential Issues
Catalogue shopping appeals to many consumers who want to spread the cost of purchases over time. As the Financial Ombudsman has noted in various decisions, lenders have specific responsibilities when offering and increasing credit limits.
The process typically begins with a modest credit limit, but many catalogue companies gradually increase these limits over time. Lenders are required to conduct proper affordability checks before any credit limit increase, including reviewing how customers have managed their accounts.
Key Regulatory Requirements
The Financial Conduct Authority (FCA) requires lenders to ensure credit remains affordable throughout the lending relationship. This includes:
- Conducting thorough affordability assessments
- Reviewing account management patterns
- Investigating deeper when warning signs appear
- Ensuring sustainable lending practices
Understanding Irresponsible Lending Practices
The Ombudsman has provided clear guidance on what constitutes irresponsible lending. In one case, they explained:
“Ms P’s outstanding balance increased significantly. And she continued to make only the minimum payment that was required. So I think that might have suggested to JDW that she was finding it difficult to manage her credit in a sustainable manner. I think it might have been reasonable at that time for JDW to probe deeper into Ms P’s finances to establish her true financial position.” https://www.financial-ombudsman.org.uk/decision/DRN2564159.pdf
This demonstrates how lenders should respond when customers show signs of financial stress, such as:
- Only making minimum payments consistently
- Significant balance increases
- Patterns suggesting unsustainable borrowing
What Evidence Might Support a Claim
Understanding what constitutes valid grounds for a catalogue credit claim helps consumers assess their situation objectively. Common indicators include:
- Credit limit increases despite only minimum payments being made
- No proper income verification before limit increases
- Failure to identify existing financial difficulties
- Overlooking debt spiral patterns
- Insufficient affordability assessments
Many consumers have discovered their lenders failed to identify crucial financial information, such as low income levels or existing payday loan usage while maintaining catalogue account repayments.
The Claims Process Explained
Making a catalogue credit claim follows established procedures. Understanding these steps helps consumers make informed decisions about whether to proceed.
Initial Assessment
The process begins with reviewing your lending history and identifying potential grounds for complaint. This involves examining credit agreements, payment history, and circumstances surrounding credit limit increases.
Formal Complaint
If grounds exist, a formal complaint is submitted to the lender outlining how they may have breached responsible lending requirements. Lenders must investigate and provide a Final Response Letter.
Potential Outcomes
Successful claims may result in:
- Refund of interest charges on balances above responsibly assessed limits
- Adjustment of account balances
- Compensation for distress and inconvenience
Financial Ombudsman Service
If the lender’s response is unsatisfactory, consumers can escalate their complaint to the Financial Ombudsman Service, which provides free, independent adjudication.
Your Options Moving Forward
Whether you choose to pursue a claim independently or seek professional assistance, understanding the process empowers you to make informed decisions. The Financial Ombudsman Service offers free guidance and can handle complaints directly from consumers.
Professional representation may streamline the process, though it’s important to understand any associated fees and terms before proceeding. Always ensure you’re comfortable with any agreements and understand your cancellation rights.
Popular Catalogue Credit Providers
If you’ve had accounts with any of these major catalogue retailers, you may wish to explore whether you have grounds for a claim:
- Very – Learn more about Very catalogue credit claims
- Next – Understand Next catalogue credit claims
- Studio – Information about Studio catalogue credit claims
- Littlewoods – Details on Littlewoods catalogue credit claims
- JD Williams – Explore JD Williams catalogue credit claims
Next Steps
Understanding your rights regarding catalogue credit claims is the first step. If you believe you may have been sold unaffordable credit, consider:
- Reviewing your account history and payment patterns
- Gathering relevant documentation
- Seeking further information about the claims process
- Understanding all available options before proceeding
Remember, you have the right to complain directly to your lender and to the Financial Ombudsman Service without using a claims management company. However, if you want to reduce stress, don’t have the energy or the free time, Allegiant could help you make a claim.
Start Your Claim Now
Justice For Debt Trapped Customers Who Suffer In Silence
Our Unaffordable Lending Claims Process
We realise that claiming against your lender can seem daunting. We aim to make the claiming process as simple as possible. We specialise in affordability claims. Our experienced team will communicate with the lender (and where required, the Ombudsman service) on your behalf. We use bespoke technology to ensure efficient claims handling. Throughout the process, we inform you of claim progress using a “stage process”, so you can track your progress easily. Please remember though, that you do not need to use a claims management company to make your complaint to your lender, and if your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.
Step 1
Pre complaint investigation and analysis
Step 2
Formal unaffordable lending complaint made
Step 3
Lender responds with a Final Response Letter
Step 4
If appropriate resolution cannot be reached with the lender, referral to Financial Ombudsman Service.
Our Fees
Our success fee is due only if your bank makes a compensation payout, and is calculated on the amount of the compensation payout
The success fee amount is calculated using a band charging system. There are five charging bands. Each band has a maximum amount that we will charge.
Success Fee Charging Table
| Band | Compensation Payout | Percentage rate the Success Fee is calculated on (including VAT) | Maximum Success Fee in band (including VAT) |
| 1 | £1 to £1,499 | 36% | £504 |
| 2 | £1,500 to £9,999 | 33.60% | £3,000 |
| 3 | £10,000 to £24,999 | 30% | £6,000 |
| 4 | £25,000 to £49,999 | 24% | £,9000 |
| 5 | £50,000 or more | 18% | £12,000 |
Below are examples of how this would work in practice.
| Band | Comp Payout (Lower) | Success Fee (Lower) | Comp Payout (Higher) | Success Fee (Higher) |
|---|---|---|---|---|
| 1 | £100 | £36 | £1,499 | £504 |
| 2 | £1,600 | £537.60 | £9,999 | £3,000 |
| 3 | £12,000 | £3,600 | £24,999 | £6,000 |
| 4 | £30,350 | £7,284 | £49,999 | £9,000 |
| 5 | £55,000 | £9,900 | £100,000 | £12,000 |
If you want to see how much we would charge for a specific amount, please visit our online fee calculator at https://staging.allegiant.co.uk/unaffordable-lending-claim-fees.
Please note that the examples in the tables are for illustration purposes only. They are not an estimate of the likely outcome or success fee.
Cancellation
You can cancel for free at any time within 14-days without giving any reason and without incurring any liability. You can communicate your cancellation by telephone, post, email or online.
You can cancel this agreement at any time after the 14-day cancellation period. However, if a complaint submitted by us is successful, the Success Fee will apply in the usual way.
You can cancel by post: Allegiant Finance Services Limited, Freepost RTYU–XUTZ–YKJC, 400 Chadwick House, Warrington Road, Birchwood Park, Warrington, WA3 6AE; (b) by email: helpdesk@allegiant-finance.co.uk; (c) by telephone: 0345 544 1563; or (d) online at https://staging.allegiant.co.uk/compliance/cancellation.
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