Next Retail Web Warning- Don't Use Next as Credit Search Undertaken

orc_2

My wife purchased shoes online at Next. She used her bank debit card to pay in full (as she thought) for the shoes. However, the small print, at the check out, includes a clause that a credit account may be opened and a credit search undertaken.

My wife did not notice this, as she assumed the purchase would be similar to other transactions on Amazon, Boots etc.

I am in the process of repairing my credit file and have registered with Experian. A search by Next appeared on my credit file, as I am linked to my wife. Likewise, the search appeared on her file at Experian.

This search reduced our credit score. No other notable transactions have been conducted by us and I order a new search on Experian every 3 months.

This is sharp practice by Next. They obviously don't just wish people to buy goods on the web from them, but want people to enter into credit contacts with them. This is incredibly bad practice in these difficult times for the majority of UK consumers. They want to encourage people to buy goods on credit, and charge just under 20% credit APR for the privilege. It is obviously a nice little earner for them. On reading the small print, they will also charge for late payments etc. Obviously, those late payments are charged on the account and people would pay interest on top of that.

Read the small print on any web purchase and at Next.

My advice:

Avoid Next. Do not buy from them until they amend their web purchase policy.

I have complained to Next and wait their reply. I will post it here as a warning to all money savers.

Depending on their reaction, I will pursue the complaint using all routes.

If you have been affected by this, please post your views and experiences here.

I also ask Next Retail to respond publicly on here to me so that we can all hear what they have to say.

Lip_Stick

Next was being talked about on BBC Breakfast this morning about this very subject - opening credit accounts for people without them even realising. Can't find anything on the website though.

orc_2

Here is a link to Next Reatil terms and conditions

http://www.next.co.uk/WinTC.asp

These are copied below, should Next change the conditions suddenly or unexpectedly.



General

These terms and conditions set out the basis on which you can use our website and place orders for items from the Next Directory. By ordering goods from Next Directory you are deemed to have understood and accepted these terms. The supplier of the goods featured is Next Directory, a trading name of Next Retail Limited and part of Next Group Plc, ("Next", "we", or "us"). Registered office Desford Road, Enderby, Leicester, LE19 4AT. Registered number 4521150 (England & Wales). VAT number 179 7658 90.
You may contact us at this address or by email to [EMAIL="enquiries@next.co.uk"]enquiries@next.co.uk[/EMAIL] or phone us on 0844 844 8333. Telephone calls to and from Next Directory may be recorded or monitored as part of our efforts to further improve service to our customers.
Unless stated otherwise, all calls to Next cost 5 pence per minute from a BT landline, Mobile Providers and other Networks may vary.
We may contact you for marketing purposes by email, mail or telephone with relevant offers from the following Next Group Companies: Next Retail Limited and Lipsy Limited.
Next Directory Accounts

A Next Directory Flexible Account ("Next Account") may be opened for you and you will be charged £3.75 for your first and each subsequent Next Directory.
The Next Directory will be sent to you twice a season while you remain an active customer of Next Directory. You may cancel the next issue by contacting Next Directory.
To open a Next Account you must be over 18 and a UK resident.
You understand that a Next Directory Card may be issued to you to allow you to use your Next Account in store to purchase items.
Purchases from the Next Directory will be charged 10 days after the goods are despatched to you and transactions in store and purchases of Gift Cards/Vouchers, Flowers, wine, photographs and Photo Art will be charged to your Next Account normally within 1 day of purchase.
When you apply to open a Next Account, a Credit Agreement will be sent to you and you must read this carefully, sign both copies and return one copy to us.
Next reserves the right to withhold all orders until it receives a signed Credit Agreement from you.
The issuing of a Directory Card is subject to the status of your account. Purchasing goods with your Directory Card is subject to the credit limit of your Account, which is variable. Collections and returns are available in most stores (excluding our airport stores) but are not available on first orders, for sofas and selected items. Store transactions will be charged to your account normally within 1 day of purchase, returns will normally be credited to your account on the next working day. We are unable to accept the return of certain items to the Next Directory and through our stores (including our airport stores). Items will be detailed on your account statement.
Data Protection

To open an Account for you, we will make searches about you at credit reference agencies who will supply us with credit information, as well as information from the Electoral Register. The agencies will record details of the search, whether or not credit is granted. We may use credit scoring methods to assess your application and to verify your identity.
To prevent identity fraud you may be required to confirm your identity when placing your first order on your Next Account. A £3.00 part payment may be requested using a Credit or Debit Card registered to the account holder's address. The rest of the order will be invoiced at a later date.
Credit searches and other information which is provided to us and/or the credit reference agencies, about you and those with whom you are linked financially, may be used by Next and other companies if credit decisions are made about you or other members of your household.
This information may also be used for debt tracing and the prevention of money laundering as well as the management of your account.
Information held about you by the credit reference agencies may already be linked to records relating to people with whom you are linked financially. For the purposes of credit searching you may be treated as financially linked and you will reassess with reference to any "associated" records.
If we enter into a credit agreement with you, we will also supply details of your agreement with us to the credit reference agencies, as well ongoing details of your account and how you manage it.
If you do not repay on time, or in full, we will advise the credit reference agencies who will record details of the debt.
All this information will be seen by other organisations carrying out later searches. The credit reference agencies may also use the records for statistical analysis about credit, insurance and fraud.
You have the right of access to your personal records held by credit reference agencies and we will supply their names and address upon request to the Data Protection Manager, Next Directory, Desford Road, Enderby, Leicester, LE19 4AT or via dataprotection@next.co.uk.
We may make periodic searches of group records and credit reference agencies to manage your Next Account, to take decisions regarding credit, including whether to make credit available or to continue or to extend existing credit. These searches will not be available to other lenders for credit assessment purposes. We may also use your information, including shopping habits, to open and run your Next Account including payment recovery, fraud prevention and debt tracing and for our marketing.
Some of the information you provide may be transferred outside the European Economic Area for processing. However, strict rules regarding the confidentiality of security of your information are in place to safeguard it.
Next reserves the right to alter or amend credit charges, to withdraw credit, to accept or reject orders, to refuse applications, or with prior notice, to close an account.
Statements

You will receive a statement every month detailing your purchases unless you have not placed an order and there is no outstanding balance. When you order items from Next Directory you have 10 days to try before you buy in the comfort of your own home.
If you decide that you do not want the item(s) you can return them (subject to certain exceptions which are detailed in the returns section below and at next.co.uk) in a new condition within 10 days. Items are credited to your account when they reach Next's warehouse or if you are returning via a store the day after they are returned to the store.
Credit Limit

Your account will be subject to a credit limit which we may vary at any time (up or down). The outstanding balance of your account must not exceed your credit limit. If you exceed your credit limit you may be asked to pay the excess immediately. Your credit limit will be shown on your statement.
Theft, Loss or Misuse of the Directory Card

If your Directory Card is lost, stolen, or misused by someone without your permission, you may have to pay up to £50 of any loss to the creditor. If it is misused with your permission you will probably be liable for ALL losses. You will not be liable to the creditor for losses which take place after you have told the creditor about the theft etc. as long as you confirm this in writing within 7 days.
Payment

Next Directory Flexible Account allows you to spread the cost of purchases (subject to status & approval). You must make a payment every month of at least the minimum payment shown on your statement. You can choose to pay more if you want to, up to the full balance. If you only pay the minimum payment it will take longer to repay the balance and you will pay more overall. Missing a payment could have severe consequences and make obtaining credit more difficult.
Minimum Payment

We will calculate your minimum monthly payment by adding together the total outstanding balance on your account and the total service charge that you would pay over 12 months on that balance, your minimum monthly payment will be 1/12th of the total or £5, whichever is the greater. If, however, your outstanding balance is less than £5 you will only have to pay your outstanding balance. Your minimum monthly payment will be recalculated in the same way whenever there is a change in the outstanding balance of your account (e.g. further goods are charged to your account, you return goods, or you make a payment).
Service Charge



Our service charge is 26.49% per annum (variable). If you do not pay your full balance in any month by the date stated, the service charge will be added as follows:

• <LI class=num>on the purchases from Next Directory and the delivery charge shown on your statement, from 10 days after your goods were sent to you; and <LI class=num>on purchases from the Next Group Plc stores using your Next Directory Card, purchases of gift vouchers or gift cards on your account and any warranties from the date of purchase; and <LI class=num>on wine and flowers, from the day after despatch to you; and <LI class=num>on any delivery, collection, installation and removal charges, from 10 days after your goods were sent to you or collected from you, and for your copy of the Next Directory and any supplemental brochures, from your statement date; and <LI class=num>on made to order furniture (including sofas), on any deposit from the date it appears on your statement and on the balance from the day after delivery to you; and <LI class=num>on any delivery and collection charges and for your copy of the Next Directory, from your statement date; and <LI class=num>on any outstanding balance from your previous statement which is brought forward to your current statement; and
• on brown and white goods (including washing machines, tumble dryers, combined washers and dryers, fridges, freezers and ovens) from 14 days after the date of your order.

Any part payment made by you will be taken into account when calculating the following month's service charge. Our service charge is calculated on a daily basis on the outstanding balance of your account. If you do not pay your account in full by the date shown on your statement the service charge will be charged on your outstanding balance from the date of your last statement.
You will not be charged any more service charge than has previously been added to your account if we receive payment of the full outstanding balance by the date shown on your statement.


We may charge an advance payment of £3.00 on first order. If we do ask for this we will tell you when you place your first order.

• In calculating the APR we have not taken into account any changes which we may make to our interest rate, or any other changes which enter into the calculation of the APR. We may introduce or vary the interest rate or such charges at any time by giving you notice.
• By way of example, the total charge for credit would be: £39.67 if purchases were made up to a credit limit of £300 and repayment was made over 12 months by 12 equal payments and that the interest rate remained the same throughout the period.

Arrears Charges

If you fail to make the minimum payment by the date specified in your statement you will be charged an administration fee of £1 which will be added to your next statement. If you fail to clear the minimum payment balance on any subsequent statement by the date specified you will be charged an additional administration fee of £7.50 which will be added to your next statement. If you send us a payment and it is returned unpaid we will charge you £5.50.
We will charge you a late payment fee of £7.50 if your account is two months in arrears. We may charge you for administering your account. Any charges will be added to your account. If your account is transferred to a debt collection agency then an administration charge of £10 will be added to the balance owing to your account on transfer.
Customers Who Pay Upfront by Credit or Debit Card

Customers without a flexible Next Directory account ("Next Account") can pay by credit or debit card. The remainder of the terms and conditions set out below will still apply.
Orders

A contract is formed between Next and you when we despatch the goods you have ordered. Until the goods are despatched the order may be cancelled. Exceptions apply to personalised items and goods made to your order, orders for which cannot be cancelled once you have received email confirmation that your order has been accepted. For a list of exceptions please see Returns below. For security reasons, until you have placed an order for goods, received your first statement and a payment has been received for those goods, you will be unable to order Gift Cards/ vouchers, ask for delivery to a store or to an alternative address.
Payment Plans

The service is restricted to Next Directory flexible account holders only and will only apply to purchases of products which Next has agreed can be paid for over 26 or 52 weeks.
For each week of your agreement (26 or 52 weeks), Next will charge to your flexible account the weekly payment due. You will receive your statement as normal each month and in order to benefit from the interest free credit offered under this arrangement, you simply need to make the weekly repayments for your purchase that have become due in the previous month. These payments are required in addition to the minimum monthly payment required on any other purchases you have made on your flexible account in the usual way. Simply make the total repayment by the date stated and you will not be charged interest for your weekly priced item.
If you do not make the minimum payment required that month for your interest free items, the unpaid amounts will remain on your account and interest will then be applied to the outstanding balance at the normal rate of 26.49%. A new required payment will be shown on your subsequent statement and you will need to make at least this repayment by the date specified to avoid further action being taken and additional charges accruing to your account.
Payments made to your account will be first credited to the purchase of your weekly priced item and then to any other balance on your account, in the order specified in the terms and conditions of your existing flexible account.
If you wish to pay weekly you may do so.
Should you default on any payment for two consecutive months, Next reserves its right to terminate your ability to take advantage of the interest free option and the full balance outstanding for the item(s) will be added to your account. If such action is taken, Next will withdraw the opportunity for you to delay payment as described above. This means you will be charged interest on the total outstanding balance. Next also reserves the right to refuse further orders on your account if you default on any payment.

Next Directory Card

The issuing of a Directory Card is subject to the status of your account.
Purchasing goods with your Directory Card is subject to the credit limit of your Account, which is variable. Collections and returns are available in most stores (excluding our airport stores) but are not available on first orders, for sofas and selected items.
Store transactions will be charged to your account normally within 1 day of purchase, returns will normally be credited to your account on the next working day. We are unable to accept the return of certain items to the Next Directory and through our stores (including our airport stores).
Items will be detailed on your account statement.

Recommend A Friend

This offer only applies to flexible account holders only.
Your friends must place a minimum order of £50 which must be kept and not returned (excluding the cost of the Next Directory).
The order must be received before 31st December 2009 in order for you and your friend to qualify for the account credit.
We reserve the right to substitute a similar offer.
On receipt of their Next Directory, your friend will be invoiced for £3.75. To qualify for this offer your friend must not currently be a customer of Next Directory and must be eligible to open a Flexible Credit Account.

dmg24

My advice:

Read what you are agreeing to before signing/ clicking the agreement button.

orc_2

dmg24 wrote: »

My advice:

Read what you are agreeing to before signing/ clicking the agreement button.

As always, useful and helpful advice. In my post I did ask people to always read the small print.

The point with Next retail is that you cannot make a purchase online without entering into the credit agreement, which is contained within, "exceptionally" small print. You cannot use your debit card or credit card on its own- it is not possible.

The great British public are generally at fault for not reading small print- accepted. However, Next Retail, perhaps a major and "trusted" British retailer are clearly at fault here and guilty of duping people into entering unwanted credit agreements.

This thread is intended as a warning to everyone not to enter unwittingly into a credit agreement with Next Retail Ltd. Next Retail don't intend for their web operation to be similar to Marks and Spencer, Amazon, Boots or any other major retailer, by its very design, it's not. They intend to maximise profit by luring people into paying extra for online purchases using credit. Only well into the check out process does it become evident that a person has entered a credit agreement. That also entails an unwarranted credit search.

A credit search has an immediate effect on an individuals credit file and possibly their credit score. Potentially, it could impact on their ability to get credit when they really need it.

At a time when everyone is struggling due to the mass incompetence and greed of the banking industry, it is sheer folly to lure people into this type of agreement, and it is more damning when it is the only optionavailavle to purchase an item.

Next Retail may well have to change their web policy on purchases and hopefully will listen and apologise to all affected consumers.That is hopefully what consumer power is about.

I have already emailed Next Retail advising them of this thread and have given them a link to it. The issue will be highlighted in consumer affairs programmes and I have no doubt that Martin himself will take up the issue.

anna_conda

The T&C from next are clear except for this bit:

A Next Directory Flexible Account ("Next Account") may be opened for you and you will be charged £3.75 for your first and each subsequent Next Directory.

I've put the weasel words in bold. To me, 'may' means an account might be opened or it might not - when do you know if they have or haven't? Seems clear that if they do open an account then you will be charged for the catalogues..........

Lip_Stick

anna_conda wrote: »

The T&C from next are clear except for this bit:

A Next Directory Flexible Account ("Next Account") may be opened for you and you will be charged £3.75 for your first and each subsequent Next Directory.

I've put the weasel words in bold. To me, 'may' means an account might be opened or it might not - when do you know if they have or haven't? Seems clear that if they do open an account then you will be charged for the catalogues..........

On the article in breakfast news, a reporter did a dummy test and bought a pair of socks. In the process he wasn't at all made aware of entering a credit agreement at all.

If you purchase something from a shop, you don't need to hunt down their terms and conditions before hand if it's for a normal purchase so why should you have to do that when making a bog standard purchase online. Hiding T&Cs somewhere on the bottom page isn't enough imo.

peachyprice

orc wrote: »

The point with Next retail is that you cannot make a purchase online without entering into the credit agreement, which is contained within, "exceptionally" small print. You cannot use your debit card or credit card on its own- it is not possible.

.

You can, I do.

orc_2

peachyprice wrote: »

You can, I do.

Thanks for that peachyprice. I had double checked, by choosing an item (a couch as it turned out) at random and going through the check out process.

I will of course check again in view of your comment.

Even if it proves to be the case, a credit search was undertaken without my wifes knowledge or agreement, when she paid in full for the shoes by debit card. The process does not appear to happen on other web sites, like the one's I mentione above.

orc_2

Lip_Stick wrote: »

On the article in breakfast news, a reporter did a dummy test and bought a pair of socks. In the process he wasn't at all made aware of entering a credit agreement at all.

If you purchase something from a shop, you don't need to hunt down their terms and conditions before hand if it's for a normal purchase so why should you have to do that when making a bog standard purchase online. Hiding T&Cs somewhere on the bottom page isn't enough imo.

Thanks lip_stick for the feedback. Have checked BBC money today and no mention, perhaps something will be posted on Monday.

orc_2

anna_conda wrote: »

The T&C from next are clear except for this bit:

A Next Directory Flexible Account ("Next Account") may be opened for you and you will be charged £3.75 for your first and each subsequent Next Directory.

I've put the weasel words in bold. To me, 'may' means an account might be opened or it might not - when do you know if they have or haven't? Seems clear that if they do open an account then you will be charged for the catalogues..........

Thats an interesting point- thanks.

From that, it would appear that unless you cancel, you will perhaps be sent unwanted catelogues and be charged for the privilege. Following that, presumably you would be charged interest, asuming you did not pay in full at the appropriate time.

Found useful thread on exact same subject here- if you avoid the unhelpful comments of some.

http://forums.moneysavingexpert.com/showthread.html?p=26681395&posted=1#post26681395

Perhaps someone can my merge my post into that one. Thanks in anticipation.