Jacamo perpetual debt

gnightly

Hi guys,

Really looking for some advice here.

I've had a Jacamo credit account for about 10 years (maybe longer). I used to make my purchases and then clear whatever I owed each month.

As I was doing this regularly Jacamo kept increasing my available credit limit.

Like lots of people, I ran into hard times a coupe of years back and could no longer afford to clear my account each month. I could only afford the minimum monthly repayments, which I scraped around to find every month so I never missed one.

I never thought to check my balance, I just kept paying the money stupidly assuming that I was chipping away at it. After logging into my account recently, which I hadn't done for a couple of years as I stopped buying anything from them (couldn't afford to), I discovered the following :

In November 2024 my outstanding balance was £1511.
Today my balance is £1452.

I've been paying them £60 per month, every month, for a couple of years now.

I had no idea that Jacamo were loan sharks!

I raised a complaint with Jacamo, which they instantly closed saying that they had acted totally within the financial ombudsman rules.

I've just called them and offered them a settlement amount of £1000 to clear this debt.

They flat out refused saying that because I hadn't experienced financial hardship they aren't prepared to settle.

I was so angry at how heartlessly they treated a long time customer that I have now cancelled my direct debit. I've also told them that if they don't accept my settlement I won't be paying them another penny.

They responded saying that I will get a CCJ served against me, which will eventually result in a bailiff visit with all of the extra financial cost that involves, and will also keep accruing interest and now also late payment charges because I've cancelled my direct debit.

Do I have any legal reproach to this whatsoever or am I just lining myself up for even more misery. Any advice would be greatly received.

Many thanks

MorningcoffeeIV

Definitely piling more misery on to yourself. You shouldn't be looking to increase your debt and worsen your financial position unless you are completely underwater with your debts and have no other options.

If you are, then go to the DFW board for more rounded help. If not, get that DD reinstated ASAP and make manual payments in the meantime so as not to miss any (more payments).

And make a point of checking your statements and balances more than every couple of years. You need to be aware of the status of your accounts so you can take appropriate action.

Brie

I agree with @MorningcoffeeIV about popping over to the debtfree wannabe board. Or I can move the post if you wish?

I don't necessarily agree with continuing to make payments. If you stop paying then the debt will default. When that happens interest should stop accruing and that's when you can start to make some progress IF you then start paying again.

Step one on the DFW board is normally to complete a statement of accounts (see below for the SOA link) based on 2 - 3 months worth of bank/card statements and then post it on the board. That way us regulars can help you hammer your budget in to shape and discuss ways to clear the debt(s) you have.

Altior

Jacamo haven't done anything wrong here have they? What did the complaint entail?

If you signed up for a credit account that attracts interest if you accumulate a balance, they will apply the interest as per the terms you agreed. These days there are plenty of warnings and alerts that paying the minimum payment risks accumulating more interest.

Their message probably said you could or may get a CCJ, not would. It is designed to make you feel like the worst will inevitably happen.

They are highly unlikely to settle for a discounted balance, more than likely if the contract is severed, the debt will eventually be sold on.

mr_stripey

OP - you're not the first person to have ignored this sort of thing only to discover your payments have barely been making a dent in the debt so don't beat yourself up about it too much.

If you can't afford to chuck a bit (a lot) more at the debt then I'd be inclined to stop paying it and let it default as @Brie suggested

If you have the £1000 you were hoping they'd accept as a settlement then maybe it is worth paying that off whch would reduce the debt - you might need to dig out the statements and work out how much effect this would have, and how much you'd then need to carry on paying to pay it off in good time.

Brie

Looking further in to this I found this surprising statement on the Jacamo website.

Prior to this they talk about the APR - which is annual of course - but the interest rate they show here is what they are charging per month!! Which probably puts the APR at 39% or something.

I tried to recreate what you have been charged since Nov 2024 and 39% is too low and I suspect you are being charged something like 46%!!! Loan sharks indeed!!! Unfortunately they are presumably complying with everything and depend on people not bothering to check what is happening (or not) with their account.

If I am correct then that means that when you've paid £60 initially about £58 was for interest. This has slowly reduced and now this month's interest is just under £56. At this rate it would take another 6 years to clear the balance.

So do check what rate you are being charged.

kaMelo

Jacamo don't hide the APR rate which is 44.9%, it's the first thing you see when you look on the 'spread the cost' page. Expensive for sure but loan sharks?

https://www.jacamo.co.uk/spread-the-cost

Altior

Exactly, per the website link, the warning I touched on is clear:

If you pay less than your full statement balance by the date on your latest statement, you will pay interest on the balance left over. If you only pay the minimum each statement, it will take longer to pay off what you owe and cost you more in interest.

I feel like you just have to write this off OP as dropping the ball. Unless, of course, you can't pay and will need to compromise your credit report for the next few years.

gnightly

Thank you for all of your comments guys. I totally understand that I have dropped the ball here by not keeping on top of my balance, I certainly wasn't trying to play the victim in that respect, I just feel that their trading practices are designed to create perpetual debt, and I was completely unaware of this until checking my balance.

The woman I spoke to today told me that £2 of every £58 payment I pay them goes towards clearing my debt, the rest is interest, and that I should have been fully aware of that.

They also told me that the reason they were rejecting my £1000 settlement offer was because I had proved that I could afford the repayments by never missing one. I find that astounding. I tried to do the right thing, even though some months it was tricky, and my reward for that was perpetual debt, and now threats of legal action if I don't keep paying it. I would have been much better off, as mentioned above, by not paying them anything and letting my account default to freeze the interest. How is this right?

I have paid the most recent amount, so my account has not missed a payment or incurred any charges - yet.

I know this is my fault for not reading what I was agreeing to, but I also feel that Jacamo are guilty of irresponsible lending here. When they saw that my monthly payments had gone from clearing the balance to paying the minimum they should have reached out to me about it. That didn't happen until June this year, which was what alerted me to checking my balance and discovering all of this - I think we all know that wasn't an oversight on their part.

I have lodged a complaint with the financial ombudsman but I'm not expecting any joy from it whatsoever, apparently only 24% of cases raised with them get upheld.

I may take the advice offered above and just pay them the grand now to reduce the interest rate. The odds are so stacked against me here. I've already paid them over £1100 on a £1500 debt, this isn't going to end unless I suck it up and pay the loan sharks what they are demanding.

gnightly

Oh and for those speculating about the the APR, I just checked my account. It's 74.9%

So what they advertise and what they actually charge are two completely different things.

gnightly

Here you go…