Mail order debt is biggest burden on consumers

Debt from mail order catalogues has surpassed mortgages or rent and payday loans as the biggest drain on consumers’ finances.

Calls to National Debtline, run by The Money Advice Trust, concerning catalogue debt increased by 10% in 2011, up to a record 25,235 calls.

The charity said that although this type of debt is largely unreported, it still plays a key role in the UK’s debt crisis.

The number of calls about catalogue debt in last year is also double the figure recorded in 2007. So far this year, more than 7,000 calls about mail order debt have been received by the charity.

“Catalogue debts go largely unmentioned in public these days, but advisers at National Debtline hear from nearly 100 people every day struggling to repay such debts,” said Joanna Elson, chief executive of the Money Advice Trust.

Catalogue credit appeals to families with low budgets, as many offer the option to buy now and pay later with no interest. Despite offering 0% interest, families are still struggling to pay off the bills that they have amassed.

The Money Advice Trust also highlighted the fact that consumers were unaware that they were signing a consumer credit agreement, meaning that their debt could be recovered by the courts. In addition, missing just a single payment could nullify the 0% interest deals.

In 2011 catalogue debt made up 12% of calls to the charity. This was behind other debts including bank loans and overdrafts, credit or store cards, council tax arrears and energy debts.

“While people of all ages are struggling, young people are at the sharp edge of this downturn,” the Money Advice Trust has said.

“High youth unemployment and stagnating incomes mean we can expect an increasing number to fall into problem debt.”

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