Can you tell me more about my confirmed Persistent Debt Paydown Plan?

If you’ve received a communication from us that gives you an estimated Paydown Plan amount and you’d like to know more about how the plan will work, please click here

If you've received a communication from us that confirms your Paydown Plan amount, please see below for answers to the questions you might have.

Why have I received this communication from you?

Prior to this latest communication, you’ll have received one in the last 3 months, letting you know we’re changing the way your minimum payment is calculated. We’re taking these steps to ensure your account doesn’t remain in Persistent Debt, and to prevent your account falling back into this status in the future.

Being in ‘Persistent Debt’ is the term our regulator – the Financial Conduct Authority (FCA) – uses to refer to any customer who pays more in interest, fees and charges than the cost of their purchases within an 18-month period.

You can find more information on Persistent Debt here

Our previous communication provided an estimated Paydown Plan amount, based on your account balance at that time. As things may have changed over the last 3 months, our latest communication was sent to confirm the amount you’ll be paying.

We’ve put together some questions and answers below, to make sure you’re 100% clear on what this change means for you.

1. Have I done anything wrong?

Please don't worry – you haven't done anything wrong. Paying the minimum amount due is in line with what's required under your credit agreement.

2. I've paid off my existing balance since you sent your last communication – what happens to my account now?

You’ll no longer have a Paydown Plan amount on your account, as you’ve paid off your balance.

However, as your account is still available for you to use, we have a responsibility to ensure your account doesn’t fall back into Persistent Debt. Therefore, if you place any orders or incur any charges on your account going forward, you’ll be required to pay up to 8% of that outstanding balance each period.

Please ensure that you continue to meet any minimum payments requested on your statement.

3. Is there anything I need to do?

You may wish to think about changing the way you make your payments. Please see question 8 for further information.

4. Why is my confirmed Paydown Plan amount less/more than the estimated amount?

The estimate was based on your balance 3 months ago. It’s likely things have changed in the meantime, as a result of the payments you have made and/or the recent orders you have placed on your account, so your Paydown Plan amount has changed to reflect this.

5. Will the Paydown Plan amount change?

No, this payment is fixed and will stay the same for the next 4 years.

If you’d like to pay a higher amount than the figure we’ve provided, please feel free to do so! It’ll ensure your Paydown Plan balance is paid off sooner, and you’ll pay less interest overall.

6. What happens to my statement now that my Paydown Plan has started?

We want to keep things as simple as possible, so you’ll still only be asked to make one payment each time we send you a statement. The minimum amount we request will consist of your fixed Paydown Plan amount and up to 8% of the balance of any new orders/charges incurred.

7. How is my minimum payment calculated going forward?

Your minimum payment will be made up of two parts.

The first part relates to your outstanding balance. You'll be asked to pay a fixed amount each period, to ensure that this balance can be paid off within 4 years - thereby ensuring your account does not remain in Persistent Debt.

The second part relates to activity on your account after your Paydown Plan starts. If you place any orders or incur any charges on your account after this date, you’ll be required to pay up to 8% of that outstanding balance each period.

8. What impact will placing further orders have on my minimum payment?

Here’s an example, based on your new spend repayment rate being 8%.

Please note: your individual rate will be confirmed on the communication we sent you.

Your outstanding balance is £1,000 and you’ve been given a fixed Paydown Plan amount of £40. This will be your new minimum payment and will be shown clearly on your statement.

If you then place an order for £100, the minimum payment for this new spend will be £8 (as your new spend repayment rate is 8% and 8% of £100 = £8).

To keep things simple, this will be added to your fixed Paydown Plan amount, bringing your total minimum payment to £48.

9. Do I need to make any changes to how I make my payments?

You can continue to make payments in the same way you do now, but the most convenient way to pay is by Direct Debit. You can set this up by simply clicking here

Note for customers who already have a Direct Debit set up: if your current payment is less than the amount requested by your Paydown Plan, your Direct Debit will be adjusted to reflect your plan.

If you choose to pay by standing order, you’ll need to check that it covers your new minimum payment.

10. Can I still shop with you?

Of course! If it’s still affordable, you can continue to shop with us as before, with the reassurance that your current outstanding balance will be completely paid off within 4 years.

Remember that any further orders will increase your minimum payment.

If you wish to pay your balance off in less than four years, you can do so by increasing your regular payment or making additional payments. This means you’ll pay less interest overall.

11. Now that I’m on a Paydown Plan, is my account out of Persistent Debt?

Your Paydown Plan will ensure your account doesn’t fall back into Persistent Debt – you just need to continue making the minimum payment requested on your statement in full and on time.

12. Will I receive a communication from you when my Paydown Plan has ended?

No, you won’t receive a communication from us once your Paydown Plan has ended.

13. Will my credit file or credit score be negatively impacted by my account being in Persistent Debt?

If you continue to make the minimum payment requested on your statement, your credit file and credit score won’t be affected at all. We’ve put this plan together as part of our duties as a responsible lender; we want to make sure you can pay off your current debt in a reasonable timeframe.

14. What if I can’t afford the new fixed amount either now or in the future?

We appreciate that your new minimum payment may be more than you are used to paying, and that this might make things difficult for you. If you’re worried about your finances and/or struggling to make existing payments, please reach out so that we can help you.

You can contact us by:

- Chat: just click the ‘Need Help’ button. If no one’s available, you can leave us a message.
- Email: [e-mail]
- Phone: [phone] (lines are open Monday-Friday, 9am-5pm)

15. Where can I get help if I'm worried about my finances?

We work with various organisations who can help support you, including:

• StepChange Debt Charity for free debt advice throughout the UK

Phone: [phone] or visit www.stepchange.org

• PayPlan for free debt advice throughout the UK

Phone: [phone], or visit www.payplan.com