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Debt Advice Handbook 14th edition

Mail order catalogue

• The legal position
• Special features
• Checklist for action

Mail order catalogues offer a way of buying goods by post and usually spread payment over a period of weeks by instalments. Payments are sometimes collected by an agent – often a friend or neighbour of the client. The arrangement is usually an ongoing one.

The legal position

Catalogue debts are regulated credit agreements whether or not there is a charge for credit, provided the credit is for no more than £25,000 (if the arrangement began before 6 April 2008) or £15,000 (if before 1 May 1998). If the arrangement began on or after 6 April 2008, the agreement is regulated regardless of the amount, unless it is exempt (see here).

Some mail order companies provide goods on the basis that they are paid for in full on receipt. These agreements are not regulated credit agreements. If in doubt about whether a catalogue debt is regulated, obtain specialist advice.

Special features

Often clients do not receive an agreement to sign. This means that the client’s liability for the debt is irredeemably unenforceable if the arrangement began before 6 April 2007 and enforceable only with a court order if the arrangement began on or after this date.1s127(3) CCA 1974 (repealed from 6 April 2008, but not retrospectively, by s15 and Sch 3 para 11 CCA 2006) In these circumstances, the client is not legally obliged to settle the debt if the arrangement began before 6 April 2007, although s/he may choose to do so.

Mail order purchases can be cancelled by returning the goods within seven days of receipt.

Catalogues are often particularly important to people on low incomes as the only way of affording essential items such as bedding or clothing.

 

1     s127(3) CCA 1974 (repealed from 6 April 2008, but not retrospectively, by s15 and Sch 3 para 11 CCA 2006) »

Checklist for action

Advisers should take the following action.

•Check liability by asking the creditor to supply a copy of the agreement signed by the client.
•Check that the goods were of satisfactory quality and as described (see here).
•If the client decides not to challenge liability, assist her/him to choose a strategy from Chapter 9, as this is a non-priority debt unless the use of mail order catalogues is the only way in which s/he can buy essential goods (see here).