A reader asked:
“I have nearly £20,000 in credit card debts due to 8 years of gambling addiction. I asked several times to lower my interest, defaulted a couple of times and also they could see gambling on my account yet they still increased my credit limits. I was taking cash advances to pay for food.
I have not gambled for 18 months now, but I am left with this horrible debt that I cannot afford to pay. I am literally paying the minimum each month just to keep them off my back and the interest they add puts me almost back where I was the month before. Aqua is the biggest problem. I have only £60 a week left after paying my bills which is left for food etc for family of four.
Is there any point telling them about the gambling or complaining about affordability? I am no longer a gambler and want to move on from the whole thing. Anything I can do I will do, to make things better for my family.”
Well done for stopping gambling!
18 months “clean” is a massive achievement.
But having this weight of debt is a huge burden in your situation. It’s a possible trigger to start gambling again in desperation.
So you are doing the right thing to look at your debt options.
The good news is that you may be able to win an affordability complaint, saying that the card lenders increased your limit to an unaffordable level. If you then win complaints against the cards, the amount you owe will be reduced as some of the interest you have paid is refunded and interest should be frozen.
How to make affordability complaints
Your cards are unaffordable now and have been for years.
The lenders should have checked that any increase in your credit limit was affordable. They knew you were only making minimum payments, sometimes even defaulting. And, in some cases, you had even asked for lower interest rates.
So they should have looked closer. If they had looked at your credit records they would have seen your escalating debts. If they had looked at the details of your account they would have seen gambling payments on the cards and the cash advances.
There is a template letter you can use to complain to each lender here: Can you get refunds from catalogues and credit cards?
At the moment credit card lenders reject most complaints, often saying you didn’t have to accept the offered credit limit increase. This doesn’t mean you have a weak case. Send it to the Financial Ombudsman (FOS) as soon as that happens.
The results of these complaints are not as reliable as for, say, payday loans. But here is what one reader said about taking a complaint to FOS:
I gambled a lot on my Aqua card and they kept increasing my limits! They rejected my complaint so it was sent to the ombudsman where its been upheld from an adjudicator and aqua are to refund me interest and fees from the 2nd time they increased the limits. The adjudicator said that Aqua should not profit from my gambling problem and mentioned I had used the card over 50 times in one month for gambling and getting charged £3 each time. Aqua are terrible but the FOS definitely don’t holding gambling against you!
Get your finances into a safe position
I think it’s well worth making these complaints. Even if you only win a few, it would be really helpful in reducing your debt mountain.
But these complaints can take a long while when they go to the ombudsman – possibly over a year.
So it’s important your finances are sustainable while the complaints go through. You can’t plan to carry on scraping by on £60 a week – that is too little to manage on.
- you make one affordable payment a month to StepChange;
- StepChange will divide this all between your creditors, they don’t charge any fees; and
- the interest on your cards should be frozen. This isn’t guaranteed, but it normally happens.
I’m suggesting a DMP as it sounds as though you can afford to make some payments each month and DMPs are good “temporary” debt solutions. If you win any of your affordability complaints, the balance you owe will be reduced and this will speed up your DMP. So it doesn’t matter if at the start it looks as though the DMP will go on for a very long while.