Questions of Cash: A PPI refund is paid at last following a catalogue of interest and insurance charges

An Independent reader contacted us after she discovered that her niece had accumulated a debt of £2,983 with Very.co.uk

Bed of naiils? An item from the online Very Catalogue, which plunged a reader deep into debt

Q. My niece came to me in the summer of last year in a distressed state. She had accumulated a debt of £2,983 with online catalogue company Very.co.uk, having failed to recognise that the deferred payment terms would one day catch up with her. The potential debt repayment would amount to half her monthly pay.

I was aghast that the interest and insurance charges seemed punitive. I asked my niece why she had taken out insurance, to which she said, "I didn't know I had". I wondered whether she had to opt out from the insurance policy, which I understand might lead to a claim for personal protection insurance [PPI] mis-selling.

I wrote to Very in August 2014, enclosing a cheque for the costs of providing the account history. The cheque was cashed immediately. My niece received a reply acknowledging receipt of my letter. I did not receive a response, so I wrote again in November last year. My niece and I have still not heard anything more. LC, Scotland

A. We also had difficulty in obtaining a full response from Very.co.uk, which is part of Shop Direct. Happily, Shop Direct has now investigated the matter.

We had asked it to look into its failure to respond to your enquiry and whether the PPI policy had been mis-sold. A spokesman said: "We can confirm that there have been a number of service failings. As a consequence, Shop Direct will now be making a payment [to the reader's niece], which includes any amount due to restore [her] to the financial position she would have been in had these service failings not occurred."

Shop Direct has also apologised for the delays in handling the issue. "We are now reviewing the specific circumstances of this case," said the spokesman.

It has refunded your niece a total of £1,816.40, comprising £995.35 for PPI premiums paid; £547.27 interest charged on the debt related to these premiums; £87 for related losses; £152.23 interest due to you at 8 per cent; and £65 for the refund of service guarantees. The payment is subject to tax of £30.45.

Pension safeguards are there for you

Q. I have had great difficulty trying to transfer my pension pot from Phoenix to my SSAS [small self-administered scheme]. The new Pension Schemes Act [which introduced "pension freedom"] is being interpreted by the financial sector to justify huge fees for unnecessary financial advice. The law is supposed to encourage the use of financial advisers where they need it – not make it obligatory. PA, Oxfordshire

A. The Phoenix Group has confirmed to us its understanding of the legal position: that you must seek independent financial advice to enable it to make the transfer.

A spokeswoman said: "We can understand [the reader's] frustrations, but at the time he requested his forms to transfer, there was not a requirement for him to seek independent financial advice. At the point we received the completed forms, the DWP [Department for Work and Pensions] and FCA [Financial Conduct Authority] requirements on independent financial advice had changed.

"[The reader] holds pension rights defined by the legislation and FCA as 'Safeguarded Benefits', which means we require evidence that financial advice has been received to ensure that customers are fully aware of the guarantees they hold and the long-term consequences of losing them. The legislation only requires us to confirm that advice has been received; we do not need details of the advice itself."

Nor is it sufficient, added Phoenix, merely to state you have taken financial advice. "[The reader] does need to show evidence that he has sought advice, by way of a signed form from the adviser," confirmed the spokeswoman.

A spokesman for the DWP added: "Members of any pension scheme with a guarantee are required by law to seek independent advice before transferring any fund valued at over £30,000."

This requirement is to safeguard individuals and their pensions, he said.

Stick to your guns over deposits

Q. At the end of August I arranged with a local company, Heritage Plastics, to do some rendering on our house. I negotiated a "special price" of £864.

We were given an installation date of 10 September, but no one turned up. I phoned and was told that I had been given an "underestimate" and that the job could not be undertaken at the quoted price. I was not offered an alternative quote.

I asked for the refund of my £90 deposit, but was told it was non-refundable. I had not been told this before. I spoke to Citizens Advice, which told me that it is a legal requirement to tell customers if a deposit is non-refundable.

Since then my phone calls and letters have gone unanswered. Citizens Advice says the deposit should be refunded, but that I need to take legal action to recover it. I fear this would be expensive. DL, Worcester

A. Within an hour of contacting Heritage Plastics, we received a response – as did you – advising that a cheque had previously been posted to you refunding the deposit, but had apparently been delayed in the post. An electronic payment was processed the same day.

Incidentally, taking small claims court action is both cheap and easy.

Questions of Cash cannot give individual advice. But we'll do our best to help if you have a financial dilemma. Email us at: questionsofcash@independent.co.uk