Every penny helps!

Sunday 26th October, 2008 - £7,499.83 in debt…

It looks like I’ve started a trend - suddenly everyone wants to pay off their debts! It could be something to do with this recession we’re teetering on the edge of, but I think my influence should be taken into account as well. Increasing your monthly credit card payments is the new cool thing to do, and Primark is the new Armani.

According to the BBC, the number of people consulting Citizens Advice about their debts has risen by a third in the past year. Given that this means more people are searching for debt advice on the internet and finding this blog (bad luck, chaps), I thought I’d give you a quick run-down of the best sources of debt advice I’ve found so far in my quest for debt freedom.

     1.  Martin Lewis’s site, www.moneysavingexpert.com, is a very fine resource once you get your head around the somewhat busy homepage (and the fact that it’s two consonants away from ‘monkey shaving expert’). Martin himself might come across as an android with no spending urges whatsoever, but the forums (especially Debt-Free Wannabe and Up Your Income) are well worth checking out for advice from fellow humans. Receiving the weekly email updates is like having a relentless snapping terrier at your heels.

     2.  The Citizens Advice homepage is at www.adviceguide.org and offers simple, step-by-step guides to paying back your debts, negotiating with your creditors, dealing with mortgage arrears and so on. It doesn’t preach, but nor does it offer alternatives to the accepted methods, or advice on coping with the emotional side of things.

     3.  One site that does look into the psychology of debt is the very one you’re reading now. As well as my own blog, which was described as “helpful” by one reader and “very good” by another (high praise indeed), Consumer Choices also has a debt centre, featuring news, articles and consumer guides.

     4.  The National Debtline offers free, confidential advice on its website (www.nationaldebtline.co.uk) or on the phone (0808 808 4000, which is a freephone number). There’s a range of factsheets on the website, but National Debtline specialises in giving personal advice via email or phone. You can email an advisor by clicking here.

     5.  If your money problems could be solved by sorting out a dispute between you and a financial service provider (your bank, insurance company or PayPal, for instance) contact the Financial Ombudsman Service at www.financial-ombudsman.org.uk for advice. If you need to write a letter of complaint, use the FSA website (www.fsa.gov.uk) to find the regulations your service provider should be obeying and quote them.

     6.  If you’re paying off debts you’ll need to save money on some essentials: www.petrolprices.com will tell you which petrol stations in your area are offering the cheapest prices per litre. It’s not something I check every day, but you can sign up for weekly email updates. Use www.mysupermarket.co.uk to compare grocery prices before you do the food shopping. I saved about 13% of my food budget by doing this.

     7.  For some genuinely useful practical help, visit www.whatsthecost.com and calculate the real cost of your debts including interest. The amazing snowball calculator will also tell you which order to pay your debts in, how much interest you can save by doing it the right way, and how much to pay per month if you want to be debt-free by a particular date. I had no idea about this site until a few months ago, but it’s now one of my favourites.

     8.  The Consumer Credit Counselling Service is another charity that gives free and confidential advice. As well as offering a free helpline (on 0800 138 1111), the website (www.CCCS.co.uk) features a Debt Remedy service, which starts with a comprehensive 20-minute questionnaire (to establish the kind of mess you’re in) and ends with the CCCS sending you a Debt Remedy booklet. This includes your budget, a summary of your debts, and advice about paying it off. Beware though: If you’re self-employed the Debt Remedy service won’t apply to you, and you can’t ask the charity for help if you’re not a UK citizen.

If you’re in lots of debt and stuck for an answer, the best advice I can give you is two-fold: (a) talk to someone, and (b) make sure you’re talking to the right someone. Doing a Google search on ‘debt help’ is likely to throw up a lot of unscrupulous companies that are trying to offer you an expensive consolidation loan or IVA. These are often the wrong solutions to the problem: what you need is support and practical, impartial advice. Good luck.

 Olivia waits patiently…

Tuesday 30th September, 2008 - £7,926.83 in debt…

So, I’ve gone against PayPal’s wishes and cancelled the unauthorised transactions. Ha. That will teach them.

Well, I might incur ten small fees, but at least I’ll have stood my ground.

You’ll remember that, on Friday, I discovered that ten PayPal transactions, totalling about £80, were about to be taken from my bank account without my permission. To cut a long story short, PayPal told me that these transactions would be refunded eventually, but if I tried to stop them going through in the first place, I’d have to pay a fine for each separate returned transaction. I wasn’t too happy about this.

I spoke to the Financial Ombudsman yesterday morning, and they seemed pretty shocked that I’d been told not to cancel the transactions. My phone call was recorded as an official complaint, which PayPal will have to address within the next couple of weeks. Watch this space.

When I discussed the whole thing with Barclays, they agreed that I should cancel the transactions but the only way I could do this would be to cancel my PayPal Direct Debit, which I did.

Now all I can do is sit and wait, on the edge of my seat, for PayPal to respond to my complaint. Well, I might make the odd cup of tea and pop to the toilet every now and then - I do have a life, you know.

Take that PayPal!

Friday 26th September, 2008 - £7,926.83 in debt…

Yes, this is my second post of the day - that’s how angry I am. You know I said Barclaycard was my least-favourite financial institution? It’s been bumped into second place by PayPal.

According to a series of emails I received this afternoon, ten payments were made from my PayPal account to Skype (a partner of PayPal, suspiciously enough), totalling about £80. This was news to me - I hadn’t made any of the transactions myself.

About two hours later, ten refunds were credited to my account. But the refunds have been placed on temporary hold until the payments themselves clear. The money has to come out of my bank account and then be paid back in.

I emailed the PayPal complaints department explaining all this and asking why it had happened and whether I could ever trust PayPal again. I got a standard, template response explaining why my refunds were being held back.

This made my blood boil.

So, I phoned the PayPal so-called “help” line. Apparently, no one knows why the payments were authorised or who by, and the money is definitely going to come out of my account whether I like it or not. I explained that I simply can’t afford for the money to come out at this stage in the month - if it does, my rent payment won’t go through.

The PayPal employee (Julie from Resolution Services, just in case anyone’s got a spare five minutes and the ability to hack her bank account) told me that when the money comes out, and when my rent doesn’t come out, PayPal will cover my bank charges. However, if I have the nerve to go to my bank and ask them to cancel the dodgy transactions so they don’t go through in the first place, PayPal will CHARGE ME for an unpaid transaction! The same thing would happen if I cancelled my Direct Debit at this stage.

At this point, I “Hulked out”.

Julie also helpfully pointed out that, if I cancelled the Direct Debit, I wouldn’t be able to use PayPal again. I assured her that I would never use PayPal again for as long as I live.

And, what’s more (oh yes, there’s more), when I get my refunds they’ll be paid into my PayPal account. Because apparently it’s okay to take money willy-nilly straight out of my Barclays account, but paying it back in is against the rules.

The only thing I can do now is to get in touch with my letting agent and explain why the rent will be late this month, and wait for the whole thing to take its course. The PayPal agent didn’t say anything about the level of compensation I’d receive if my landlord decided to evict me for breaking the terms of my contract but, as long as I get my £8 bank charge back, that’s apparently all that matters.

Deep breaths. Go to your happy place, Olivia.

I can understand that sometimes PayPal can’t prevent dodgy transactions from going through, and it’s to their credit that they noticed quickly and put the refund procedure in place on the same day. However, the customer service I’ve received has been horrendous. Via both email and phone, PayPal’s agents have answered the questions they’re expecting to hear and not the ones I’ve actually asked. And, if I can prevent the unauthorised transactions from going through by talking to my bank, what gives PayPal the right to impose a charge of their own?

Apparently I can complain to the Financial Ombudsman, and I will be doing that, but I can’t imagine it doing any good after the event.

This has got to be the worst thing about being in debt. When something like this happens, the only thing I can do is let it happen. Or borrow cash from my family, inconveniencing them and embarrassing me. I’ve never felt so completely at the mercy of a financial company. What if each of those transactions had been £100..?