Shop Direct Finance Group Debt – Should You Pay? 

If you’ve got a letter about a debt from Shop Direct Finance Company Ltd, you might be feeling confused. Don’t worry; this guide is here to help you understand what to do next.

Each month, more than 170,000 people visit our website for advice on debt solutions, so know that you’re not alone in this.

In this article, we’ll help you to:

•  Find out if the debt is really yours and what to do if it isn’t.
•  Learn ways to stop Shop Direct Group from contacting you.
•  Explore options to make a complaint about Shop Direct Group.
•  Discover if you can write off some of the debt or set up a payment plan.

Research shows that 64% of people in the UK find dealing with debt collectors stressful¹. Some of our team members have even experienced this.

We’re here to share our knowledge and help you feel confident about the next steps you can take.

Why is the Shop Direct Group contacting you?

The reasons for Shop Direct Group contact are quite simple – they think that you owe them money.

You’ve probably received letters from Shop Direct Finance because you have credit with them or one of their retail partners.

Most likely in the form of a catalogue credit that you’ve failed to make payments on.

You may also be confused because your letter has come from Arrow Global. They are debt collectors that Shop Direct Finance use to chase owed debts.

These are often used as scare tactics, and sometimes these attempts are to get a debt paid sooner rather than later. 

If you don’t recognise the name Shop Direct Group, can you think of a retail store where you have a credit card? Or perhaps you purchased items from a catalogue with a store credit buy-now-pay-later scheme that you couldn’t afford?

This is what these letters will be referring to.

UK Personal Debt 2021 Update:
As of April 2021, the average UK credit card debt was £1,928

(Source: The Money Charity)

How Should You Respond to Shop Direct Finance Company?

Here are three steps to take after receiving a letter from Shop Direct Finance.

To summarise, they are:

• Ask for proof of the debt – it’s likely they are after someone of the same or similar name and have got the wrong one.
• Check the debt is legitimate
• Check the statute-barred status of the debt. If you haven’t made any payments in the last 6 years, you may not be liable to pay the debt.

Read on below for an elaboration on these steps, and why they’re so important to you.

1. Ask for proof of the debt

Respond to the finance company, and let them know you dispute the debt in question and require proof.

Shop Direct Carval have to respond to this if they want the outstanding debt paid.

They should send you the original credit agreement that you signed when you took on the store credit card or catalogue order.

If they can’t provide you with this signed credit agreement, they have no proof and no legal recourse to recover the debt.

Follow our ‘prove it’ guide with letter templates and get them to prove that you owe the money.

2. Check the debt is legitimate

While you’re waiting for them to send you proof, do your own due diligence to see if the debt is legitimate.

If you’re unsure, free credit check sites like Experian will be able to tell you if you have accounts with any of the Shop Direct Finance companies.

3. Check the statute-barred status

Finally, if they can prove that the debt is yours, check to see if it is statute-barred. In England, creditors cannot chase debts more than six years old (in Scotland, it is five years).

The clock will start ticking from the last payment made towards it or from the written acknowledgement of the debt. If it’s close to the time limit, do not acknowledge the debt in writing.

Should You Repay the Shop Direct Finance Company Debt?

Yes.

If you are in a financial situation to pay off the debt then the quicker you can pay off the debt the quicker you can stop the phone calls and letters.

Not only this but by beginning to pay the debt you can limit the likelihood of the company taking you to court which can involve hefty fees.

But you should never agree to pay the debt if it will put you into further hardship. In the section below the alternatives are explained in more detail.

» TAKE ACTION NOW: Fill out the short debt form

Should you Ignore Shop Direct Finance?

We always recommend responding to debt collectors – even just to question the debt’s validity.

Remember, you have the right to request proof of the debt. They have to prove it or they can’t charge you.

Ignoring correspondence from Shop Direct Finance won’t make them go away, or the debt that you owe.

What may actually happen is that after a while they will escalate the matter by sending agents and eventually take you to court.

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What if You Can’t Afford to Repay the Debt?

If you are struggling with Shop Direct Payments, you may wish to consider a debt solution.

There are several options for debt relief in the UK so it is important to get some advice before to find out what would work best for you.

We have linked some organisations that offer free financial advice and free debt management advice at the bottom of this page.

Individual Voluntary Arrangement (IVA) or Trust Deed

An IVA is a formal agreement between you and your creditors. You agree to pay a monthly sum that is shared among your debts, and your creditors agree not to contact you.

An IVA usually lasts 5 or 6 years and at the end of it, your outstanding debts can be wiped off.

Keep in mind that an IVA is not for everyone. You must owe several thousand pounds to more than one creditor to be eligible. You also need to demonstrate that you have some disposable income every month to cover the costs of your IVA.

IVAs are unavailable in Scotland. Instead, you can opt for a Trust Deed.

These work in the same way as an IVA – you pay a single monthly payment that is shared among your debts, your creditors don’t contact you, and your remaining debts can be wiped out at the end.

Debt Relief Order (DRO)

If you have some debts but no assets and a limited income, you may be able to apply for a DRO.

Under a DRO, your interest is frozen and your creditors can’t contact you. Your DRO will last for 12 months and you don’t make a payment towards your debts during this time.

Your finances are then reassessed. If there has been no improvement in your circumstances, then your debts may be written off.

Bankruptcy or Sequestration

If you have debts but no realistic way of paying them off, you may need to declare bankruptcy.

Bankruptcy – or sequestration in Scotland – has a negative image, but it could be your only way of getting a financial fresh start.

If you are in Scotland and have few assets and a limited income, you could be eligible for a minimal asset process bankruptcy (MAP). A MAP is a quicker, cheaper, and more straightforward version of sequestration and is worth considering.

What Legal Action Can Shop Direct Finance Company Take Against You?

You’ll first receive a slew of letters or phone calls.

Sending regular letters is a common tactic used by finance firms to intimidate people into paying back the debt without question.

If they are unable to reach you in this way then there are several stages that they may take to try to contact you and get the debt repaid.

Send agents to your home or property

After failing to contact you the company may send their own agents to your home or property to try to make contact with you.

Even if they claim to be bailiffs, they are not and have no right to enter your property nor remove your assets.

If you ask they must leave your property, so never invite them inside.

If you don’t want to answer the door to them, simply tell them to leave from a window or ignore them.

County Court Judgement

If they still cannot contact you regarding the debt, then they will likely take you to court, but not until they’ve given you enough time to make attempts to pay the debt.

If they take you to court, there are several outcomes.

If granted, a County Court Judgement will compel you to pay the debt. Otherwise, the company can get a warrant for bailiffs to visit your home.

If this is the case, the bailiffs do have the right to enter your property and seize assets.

Attachment of Earnings Order

Alternatively, they may apply for an Attachment of Earnings order which will take money directly from your pay before you see it. This is only filed against those will a regular salaried job.

Main Differences Between Debt Collectors and Bailiffs

To prevent unfair treatment and any unwanted situations, it’s important to understand the main differences between debt collectors and bailiffs.

Remember, debt collectors don’t have the power to enter your home or take any of your possessions.

We’ve put together this quick table to help you understand what differentiates debt collectors from bailiffs. If you want to learn more about your rights when dealing with debt, please read our specialized guide.

Can you stop the Shop Direct Group from contacting you?

Unfortunately, Shop Direct Finance has the right to try to contact you regarding debt. Initially, they’ll do this by phone or letter.

If they’re calling you too often or sending too many letters, you can get in contact with them and tell them your preferred contact method, whether this is by phone, mail etc. 

Once you have informed them of this, they should only try to get in touch via this form of contact. Any further contact from them will be considered harassment, and you can make a complaint. We go through this process below.

Can You Make a Complaint about the Shop Direct Group?

If you feel that the Shop Direct Group has acted inappropriately or broken any of the Financial Conduct Authority’s (FCA) guidelines, you can make a complaint.

Address your first complaint to Shop Direct Group, as they need the chance to settle the matter themselves. Filing a complaint against Shop Direct is simple, and you can follow their complaints process here.

If you feel that they have not dealt with your complaint appropriately, you can escalate matters and complain to the Financial Ombudsman Service (FOS). They will investigate and, if your complaint is upheld, Shop Direct Finance Group may be fined, and you could be owed compensation.

Shop Direct Finance Group Contact Information

FAQs

Need More Debt Management Options?

If you’re still unsure how to deal with your Shop Direct Finance Company debt and you want to explore more options, head to our full guide on getting out of debt.

References

1. Indebted Debt Collection Survey