Episode 4

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0:00:02 > 0:00:05We all like to think we're getting a fair deal for our money,

0:00:05 > 0:00:07whether we're buying, selling or taking out a loan.

0:00:07 > 0:00:10And when times are hard, it matters even more.

0:00:10 > 0:00:14But many of the deals on offer could cause you problems.

0:00:14 > 0:00:16Some could even wreck your life.

0:00:22 > 0:00:23In today's programme:

0:00:23 > 0:00:26Turn that gold into cash...

0:00:26 > 0:00:28We investigate the deals you can get

0:00:28 > 0:00:30when it comes to cashing in your gold.

0:00:30 > 0:00:34And reveal how one company offered 85% less than its worth.

0:00:34 > 0:00:38It's either a mistake or they've sent the wrong cheque

0:00:38 > 0:00:39to the wrong person.

0:00:39 > 0:00:43We meet the lady who found out she had a £30,000 debt

0:00:43 > 0:00:45she never knew existed.

0:00:45 > 0:00:49I'm the sole person responsible for paying the money back,

0:00:49 > 0:00:51which is completely unfair.

0:00:51 > 0:00:54Can our debt-busting expert help her get out of the deal

0:00:54 > 0:00:56she wished she'd never made?

0:00:56 > 0:00:59Would you consider ending the arrangement, writing the debt off?

0:00:59 > 0:01:03And we're on the road with the UK's Illegal Money Lending Unit,

0:01:03 > 0:01:07tasked with ending the worst deal in Britain - loan sharking.

0:01:07 > 0:01:09We're in! Police!

0:01:12 > 0:01:17If you've got any gold, anything at all, trade it in for cash...

0:01:17 > 0:01:21For people looking for cash in a hurry, there's one deal in Britain

0:01:21 > 0:01:25that's booming at the moment, selling your old gold for cash.

0:01:26 > 0:01:29There are plenty of companies trying to woo you to sell any precious metal

0:01:29 > 0:01:31you might have in your possession.

0:01:31 > 0:01:37The deals may appear very tempting, but what will you be offered if you take them up?

0:01:37 > 0:01:38We decided to find out.

0:01:40 > 0:01:45Welcome to the real world of your sold old gold.

0:01:45 > 0:01:47The easy way to turn your unwanted gold into cash...

0:01:47 > 0:01:50The price of gold has risen five-fold in the last ten years,

0:01:50 > 0:01:57leading hundreds of firms to start offering quick money for your gold jewellery.

0:01:57 > 0:02:00But if you're looking for a quick fix for your cash flow,

0:02:00 > 0:02:02then experts warn you need to take care.

0:02:04 > 0:02:07A lot of people are desperate to raise extra money

0:02:07 > 0:02:10at short notice and that's exactly what these gold companies offer.

0:02:10 > 0:02:12But they prey on the fact that most people

0:02:12 > 0:02:15don't understand that any jewellery they do have

0:02:15 > 0:02:18might be worth an awful lot more than they thought it was.

0:02:21 > 0:02:24Amelia Payne, from Chobham in Surrey, is looking to sell

0:02:24 > 0:02:26some old gold in her possession.

0:02:26 > 0:02:29She wants to know what the best and worst deals on offer are,

0:02:29 > 0:02:32so she's agreed to put some of the most common methods

0:02:32 > 0:02:35of cashing in gold to the test for us.

0:02:35 > 0:02:40When her father died, Amelia inherited some gold chains

0:02:40 > 0:02:43which he'd kept as keepsakes.

0:02:43 > 0:02:47I can't believe that it was 25 years ago that dad died - it just,

0:02:47 > 0:02:52it's still quite a vivid memory, it's still quite sad.

0:02:52 > 0:02:58My father died and I was given a little wooden box by my sister,

0:02:58 > 0:03:02and in it were some gold chains.

0:03:02 > 0:03:05Keeping memories of her father alive has now been

0:03:05 > 0:03:08superseded by the need to meet daily bills.

0:03:08 > 0:03:11And now it's the time to get rid of them.

0:03:12 > 0:03:14But it wasn't until recently

0:03:14 > 0:03:18Amelia realised that instead of sitting in a drawer gathering dust,

0:03:18 > 0:03:22she could actually make some money from her father's chains.

0:03:22 > 0:03:25I'm not sure that it necessarily occurred to me

0:03:25 > 0:03:29until I met someone who had sold her gold chains.

0:03:29 > 0:03:31And she got quite a lot of money for them.

0:03:34 > 0:03:37If and when I do sell the gold, it would go a long way to

0:03:37 > 0:03:40helping with the bills and the children and all sorts.

0:03:40 > 0:03:43Then turn that gold into cash...

0:03:43 > 0:03:47With TV advertising targeting the cash-strapped consumer,

0:03:47 > 0:03:51and with more and more jewellery shops and online companies

0:03:51 > 0:03:54offering cash for gold, it's no wonder people

0:03:54 > 0:03:58are confused as to where to start and what deals they should go for.

0:03:59 > 0:04:02We're taking Amelia to the London Assay Office

0:04:02 > 0:04:06so that she can get an accurate valuation for her gold.

0:04:10 > 0:04:12The London Assay Office is responsible for testing

0:04:12 > 0:04:15the quality of gold.

0:04:17 > 0:04:21They protect consumers by testing its metallurgical content.

0:04:21 > 0:04:23If they're happy, it's they who give out hallmarks

0:04:23 > 0:04:25to items they've approved.

0:04:27 > 0:04:30They don't buy gold, but in Amelia's case they've agreed to give us

0:04:30 > 0:04:34an accurate and up-to-date figure for the scrap value of her gold.

0:04:34 > 0:04:39But before the Assay Office can value the gold,

0:04:39 > 0:04:42they need to know exactly what Amelia's jewellery is made of.

0:04:42 > 0:04:47Head of training, Dave Merry, will be assessing Amelia's gold.

0:04:47 > 0:04:49He's been testing gold here for over 40 years

0:04:49 > 0:04:51and knows just what to look for.

0:04:51 > 0:04:53The wonderment of our job

0:04:53 > 0:04:56is the fact that every article you pick up

0:04:56 > 0:05:01you've not really any true idea of what it is until you've tested it.

0:05:01 > 0:05:05If you've got a batch of old jewellery lying around at home

0:05:05 > 0:05:08and it does bear a hallmark, you don't need to have it tested,

0:05:08 > 0:05:12it already has a guarantee of a certain standard.

0:05:12 > 0:05:18However, not all gold jewellery is hallmarked so Dave uses an X-ray fluorescence spectrometer

0:05:18 > 0:05:21to reveal the make-up and purity of the gold.

0:05:21 > 0:05:25As the X-rays hit the article, they create

0:05:25 > 0:05:30an excitement in the molecules of the metal and then the software

0:05:30 > 0:05:35picks up the wavelength of each separate alloy within the gold.

0:05:35 > 0:05:43The lowest standard in the UK, nine carat, technically it's 37.5% gold,

0:05:43 > 0:05:48the rest is made up of different alloys depending on the colour of the gold.

0:05:50 > 0:05:55In testing Amelia's charm bracelet, one of the charms looks promising.

0:05:55 > 0:06:01This is actually a 14 carat charm, we've got 63% gold,

0:06:01 > 0:06:048.4% silver, 27.6% copper.

0:06:04 > 0:06:06So slightly higher standard.

0:06:07 > 0:06:10Any gold which is nine carat and above is valuable,

0:06:10 > 0:06:13so that's good news for Amelia.

0:06:13 > 0:06:17Next to be tested is one of the white and yellow chains.

0:06:19 > 0:06:23This is 31% gold.

0:06:23 > 0:06:27That figure for gold is much lower than the nine carat standard.

0:06:27 > 0:06:32Unfortunately, any gold under nine carats is unsaleable.

0:06:32 > 0:06:36Amelia's remaining chains, however, look much more promising.

0:06:36 > 0:06:41This gold is coming out at 40%, this is about ten carat.

0:06:41 > 0:06:46And Dave doesn't need to put her fob watch chain to the test.

0:06:46 > 0:06:51This gold Albert chain has got a nine carat hallmark on every link.

0:06:51 > 0:06:54So that's ready to go.

0:06:56 > 0:06:58Now knowing what Amelia's gold is made of,

0:06:58 > 0:07:01the London Assay Office is in a position to put a price on it.

0:07:02 > 0:07:06Hello, Amelia.

0:07:06 > 0:07:09It's Chief Valuer Steve Jordan's job to give Amelia a hard cash value

0:07:09 > 0:07:11for her scrap gold.

0:07:14 > 0:07:20At the time of valuation, the price of gold was around £34.40 per gram,

0:07:20 > 0:07:22or £1,066 per ounce.

0:07:24 > 0:07:27This will be the least value, it's nine carat gold.

0:07:29 > 0:07:33The clasp has been added later, this is 18 carat gold.

0:07:33 > 0:07:35I would expect it to make £45.

0:07:35 > 0:07:37- As scrap?- As scrap.

0:07:37 > 0:07:39The clasp would be £85.

0:07:39 > 0:07:41That's more than I thought.

0:07:41 > 0:07:45The bad news, if I may, we've tested it in the lab

0:07:45 > 0:07:49and it doesn't test as fine metal, not even silver.

0:07:49 > 0:07:53So I'm afraid that one is fit for the bin.

0:07:53 > 0:07:56Really? I'll keep that one I think.

0:07:56 > 0:07:58The next one?

0:07:58 > 0:08:04The charm bracelet as a piece, has a market value at £230.

0:08:04 > 0:08:07- Very pleasantly surprised.- Oh good.

0:08:07 > 0:08:13This one, which is generally a lady's watch chain.

0:08:13 > 0:08:18I never thought of it being a lady's, as it was my dad's.

0:08:18 > 0:08:22This is an interesting combination of platinum and nine carat gold.

0:08:22 > 0:08:23So £210.

0:08:23 > 0:08:26Oh, good, because that was the special one

0:08:26 > 0:08:30because that was the one my father actually wore.

0:08:30 > 0:08:33The finest piece is the double Albert.

0:08:33 > 0:08:39Dates to around 1920, it's in really good condition - as such, should fetch around £270.

0:08:39 > 0:08:42Well, I'm thrilled, thank you very much.

0:08:43 > 0:08:48The Assay Office has given Amelia's gold a total value of £840.

0:08:48 > 0:08:52That might be the best she can expect to get,

0:08:52 > 0:08:55but how much will the different gold dealers actually offer her?

0:08:55 > 0:08:57We'll find out later.

0:09:02 > 0:09:05It's early morning in Greater Manchester,

0:09:05 > 0:09:09and members of the UK's Illegal Money Lending Team, along with police,

0:09:09 > 0:09:12are about to take proactive measures

0:09:12 > 0:09:17against the worst financial deal on offer in Britain - loan sharking.

0:09:17 > 0:09:21Tony Quigley is head of the Illegal Money Lending Unit,

0:09:21 > 0:09:23a special team set up to combat the problem.

0:09:23 > 0:09:27We're executing warrants at four addresses today.

0:09:27 > 0:09:31We're hoping to identify three individuals we're aware of,

0:09:31 > 0:09:34and effect arrests.

0:09:34 > 0:09:37Loan sharks are unlicensed back-street money lenders.

0:09:37 > 0:09:43They prey on the poorest in society, lending money when no-one else will.

0:09:43 > 0:09:45They charge exorbitant interest rates,

0:09:45 > 0:09:49often backed up with threats and violence.

0:09:49 > 0:09:53People are really frightened about illegal moneylenders

0:09:53 > 0:09:55because they intimidate people.

0:09:55 > 0:09:58Because the debts are illegal they can't be enforced.

0:09:58 > 0:10:01They way they enforce them is through bullying.

0:10:02 > 0:10:05People are very frightened to come forward.

0:10:08 > 0:10:11Today, Tony's team is heading up Operation Apache,

0:10:11 > 0:10:14aimed at people they've received intelligence about,

0:10:14 > 0:10:17who are suspected of engaging in illegal money lending.

0:10:19 > 0:10:22It's one of hundreds of operations they conduct every year

0:10:22 > 0:10:24to try and chase loan sharks from British streets.

0:10:26 > 0:10:27This is our day job.

0:10:27 > 0:10:30Stop loan sharks and catching loan sharks is our day job,

0:10:30 > 0:10:34making sure they see the full weight of the law.

0:10:34 > 0:10:37The suspected loan shark has no idea the team are coming,

0:10:37 > 0:10:41but one way or another, he's about to find out.

0:10:41 > 0:10:44We're in - Police!

0:10:44 > 0:10:46The team can't afford to give the suspected loan shark

0:10:46 > 0:10:48any chance to destroy evidence.

0:10:48 > 0:10:50And once inside,

0:10:50 > 0:10:53they soon find one of the three suspects they're looking for.

0:10:54 > 0:10:58She's arrested and taken into police custody for further questioning.

0:11:00 > 0:11:02Across town, another team is at a different address,

0:11:02 > 0:11:05looking for suspects in the same case.

0:11:05 > 0:11:08Open the door or it's going in.

0:11:08 > 0:11:11Open the door or we'll kick the door in.

0:11:11 > 0:11:14KNOCKING

0:11:15 > 0:11:19The threats to the resident's door, have the desired effect.

0:11:21 > 0:11:24And as before, inside, a suspect is soon arrested

0:11:24 > 0:11:26and then taken off for questioning.

0:11:29 > 0:11:32Meanwhile, the rest of the team begin their search.

0:11:32 > 0:11:36They're looking for any evidence that might tie their suspects

0:11:36 > 0:11:39to illegal money lending, such as large amounts of cash

0:11:39 > 0:11:41or paperwork detailing loans.

0:11:44 > 0:11:46A sniffer dog, trained to smell out cash,

0:11:46 > 0:11:48is brought in to see what he can find.

0:11:49 > 0:11:53And it's not long before the team begin to turn up evidence.

0:11:54 > 0:11:55Back at the station,

0:11:55 > 0:11:58Tony begins sifting through what the team have found.

0:11:58 > 0:12:00Yeah, reasonably successful today.

0:12:00 > 0:12:03We've got people in custody.

0:12:03 > 0:12:09We've seized some paperwork and bits and pieces

0:12:09 > 0:12:12and the team are working through it at the moment.

0:12:14 > 0:12:16Head of the Greater Manchester Police team

0:12:16 > 0:12:21involved in the operation is Detective Sergeant Debbie Oakes.

0:12:21 > 0:12:24The Illegal Moneylending Team, plus officers from Trading Standards

0:12:24 > 0:12:29and from Operation Gulf are now going through the evidence we've secured.

0:12:29 > 0:12:32And we're tracing people we can speak to.

0:12:32 > 0:12:36I know there's over a dozen people they're going to speak to

0:12:36 > 0:12:42to secure the support they need to come forward as a witness.

0:12:42 > 0:12:47One of the people arrested was cautioned and has forfeited cash.

0:12:47 > 0:12:52Another is on bail until May, pending further enquiries.

0:12:58 > 0:13:01When David Carman from Worksop in Nottinghamshire

0:13:01 > 0:13:07fell on hard times, he made deals with two very different sources of financial help.

0:13:07 > 0:13:10One was legal, the other an illegal money lender.

0:13:10 > 0:13:15But both took advantage of his precarious position

0:13:15 > 0:13:18and the results have left him in financial ruin.

0:13:18 > 0:13:22This was one of the worst times of my life.

0:13:22 > 0:13:28David got into debt after suffering a heart attack and stroke in 1999.

0:13:28 > 0:13:34He was forced to stop work as a long-distance lorry driver at the age of 49.

0:13:34 > 0:13:40He went from earning £24,000 a year to living on benefits of £75 a week.

0:13:40 > 0:13:45Within a year, he'd mounted up £16,500 of debt.

0:13:45 > 0:13:49My wife had five children, four living with her

0:13:49 > 0:13:52so there was six of us to feed.

0:13:52 > 0:14:00There wasn't enough to pay our credit cards or the mortgage

0:14:00 > 0:14:03and from there the house was repossessed.

0:14:03 > 0:14:08We contacted a debt management company to try and sort things out

0:14:08 > 0:14:14and started making payments to them rather then direct to the companies.

0:14:14 > 0:14:18To get on top of the situation, David contacted a debt management company.

0:14:18 > 0:14:22Under their deal, David would pay them a monthly amount,

0:14:22 > 0:14:26and they would arrange the repayments to all of his creditors.

0:14:26 > 0:14:28At first, it made their lives easier.

0:14:28 > 0:14:31It took a great deal of stress and worry away from us.

0:14:31 > 0:14:37We were no longer getting threatening letters every day.

0:14:37 > 0:14:44David and his wife, Anne, continued paying their debt management company £350 a month for 9 years,

0:14:44 > 0:14:49thinking they were slowly getting back in control of their finances.

0:14:49 > 0:14:55But then, after suffering from ill heath for many years, David's wife, Anne, died.

0:14:55 > 0:15:03When my wife passed away, it reduced the income from £600,

0:15:03 > 0:15:08which was made up of social security and disability benefits,

0:15:08 > 0:15:12down to £380.

0:15:16 > 0:15:19I still find it so painful.

0:15:23 > 0:15:27The cost of giving Anne a proper funeral was over £2000,

0:15:27 > 0:15:31and David was in no position to pay this on the income he was receiving.

0:15:31 > 0:15:33To find the money,

0:15:33 > 0:15:37David's only option was to apply to the Social Fund,

0:15:37 > 0:15:42a scheme that helps low-income families with one-off emergency payments.

0:15:42 > 0:15:47They agreed to help, but wouldn't give David all the money he was hoping for.

0:15:47 > 0:15:50They decided to pay half,

0:15:50 > 0:15:55leaving me to find just over £1,000.

0:15:55 > 0:16:00I contacted the funeral director

0:16:00 > 0:16:05and offered to pay on a monthly basis.

0:16:05 > 0:16:09But he would not accept that,

0:16:09 > 0:16:14he said he would withhold the remains until such times that it was paid.

0:16:17 > 0:16:21I just couldn't believe the funeral director.

0:16:21 > 0:16:25You're going through such emotional trauma.

0:16:25 > 0:16:32And to be told that, you've got to do everything in your power

0:16:32 > 0:16:36to come up with that money.

0:16:36 > 0:16:43With another £1,200 to find for his wife's funeral and a credit rating below zero,

0:16:43 > 0:16:46David knew no-one was going to lend him any more money.

0:16:46 > 0:16:50Then he remembered a leaflet that had come through his letterbox.

0:16:50 > 0:16:56The only option I had was to borrow from a back-street lender.

0:16:56 > 0:17:01There was a mobile number on the leaflet which I phoned

0:17:01 > 0:17:06and within two hours someone came to see me,

0:17:06 > 0:17:11wanting to know how much I wanted, how long for and why.

0:17:14 > 0:17:19The chap that came to see me, although the leaflet appeared quite friendly,

0:17:19 > 0:17:24he made no bones about being very forceful.

0:17:24 > 0:17:26The conversation was made very clear

0:17:29 > 0:17:34that there would probably be repercussions if payments weren't made

0:17:34 > 0:17:40but the repercussions weren't told as such, they were hinted at.

0:17:41 > 0:17:45I had no option because I had to get the money from somewhere.

0:17:45 > 0:17:48It was the only option I had left.

0:17:48 > 0:17:56David borrowed £1,000 and agreed to pay back just over £100 a week.

0:17:56 > 0:17:59Although the quick cash seemed like a good idea at the time,

0:17:59 > 0:18:05David was struggling to find the money to pay the staggering £450 in interest

0:18:05 > 0:18:09that the loan shark demanded over the 5 months of the loan.

0:18:09 > 0:18:11It was every penny we had coming in,

0:18:11 > 0:18:14which was the total income

0:18:14 > 0:18:19from social security and child benefit.

0:18:19 > 0:18:25David was so afraid of the loan shark that he put all the money he received

0:18:25 > 0:18:28towards paying him off as fast as possible.

0:18:28 > 0:18:31It meant giving every penny we had.

0:18:31 > 0:18:36So, rather than take 5 months, I managed to pay it off in 3 months.

0:18:36 > 0:18:41David might have paid off the loan shark,

0:18:41 > 0:18:44but it wasn't the end of his problems.

0:18:44 > 0:18:47Unfortunately for him, the high interest payments it involved

0:18:47 > 0:18:52meant he was running into problems paying his debt management company.

0:18:52 > 0:18:59Later, we'll discover how that plan was far from the rescue package David had been led to believe.

0:18:59 > 0:19:04As the letters come now I shred them, quite often I don't even open them.

0:19:10 > 0:19:15"Have you got any old gold laying around? Want to know how you can turn it into cash?"

0:19:15 > 0:19:19It's not just television advertising that's becoming dominated by companies

0:19:19 > 0:19:22looking to give a cash deal for your old gold.

0:19:22 > 0:19:27More and more high street shops are also now buying into the gold game.

0:19:27 > 0:19:30Amelia Payne's already had her gold valued

0:19:30 > 0:19:35at the London Assay Office at £840.

0:19:35 > 0:19:41Now she's hitting the high street to see what price the jewellers will offer her.

0:19:41 > 0:19:45She's brought her gold chains to Basingstoke.

0:19:45 > 0:19:48Hatton Goldsmiths claim that it's never been easier

0:19:48 > 0:19:51to get a great deal for your unwanted gold.

0:19:51 > 0:19:58This gold buying shop quoted me just over £600, which I was pleasantly surprised.

0:20:00 > 0:20:05F Hinds have been cashing in gold for two years,

0:20:05 > 0:20:08claiming to offer you not only security and confidence,

0:20:08 > 0:20:14but also one of the highest rates available anywhere on the high street or online.

0:20:14 > 0:20:19The valuation was £598.

0:20:19 > 0:20:24Warren James is one of the largest independent jewellers in the UK

0:20:24 > 0:20:29and has been offering cash for gold services for two years.

0:20:29 > 0:20:31The valuation was very good. It was £628.

0:20:34 > 0:20:38Finally, Amelia is visiting Stone's Fine Jewellery Store.

0:20:38 > 0:20:43They're an old hand at the cash for gold game, having been trading for 31 years.

0:20:44 > 0:20:50They've valued my jewellery at the best so far, at £670, which is wonderful.

0:20:52 > 0:20:58Amelia's high street valuations come in around £200 less than that of the Assay office.

0:20:58 > 0:21:02But how will online deals compare?

0:21:02 > 0:21:06These companies encourage people to sell their unwanted gold

0:21:06 > 0:21:08by sending it off to be valued by post.

0:21:08 > 0:21:12A few years ago these postal gold companies just didn't exist.

0:21:12 > 0:21:16They popped up everywhere in the response to the rising gold price.

0:21:16 > 0:21:19Years ago, people with unwanted jewellery in their drawer at home

0:21:19 > 0:21:23might not have thought about selling it and getting a quick buck.

0:21:23 > 0:21:27Now it's hard not be thinking about it, because you've got adverts on the television

0:21:27 > 0:21:30prompting you to think about selling your unwanted gold.

0:21:30 > 0:21:36Amelia's keen to see what sort of deal the online gold buyers will offer her.

0:21:36 > 0:21:41But first, she's got to choose which company to send her gold to.

0:21:41 > 0:21:44I've looked on a few sites, it's very easy.

0:21:44 > 0:21:49You put in the weight and then you put in the carats and they will give you a price.

0:21:49 > 0:21:55The Cash for my Gold site valued Amelia's gold at £756.

0:21:55 > 0:22:00Tesco and Ramsdens valued the gold at £620.

0:22:00 > 0:22:05But there's another site which attracts Amelia's interest even more.

0:22:05 > 0:22:10PostalGold.com is one of the biggest players in the online market.

0:22:12 > 0:22:15As far as I can see, you can't get an estimate,

0:22:15 > 0:22:19you literally just have to send it off.

0:22:20 > 0:22:25Having seen the estimated valuations from other websites,

0:22:25 > 0:22:30she decides to send all her chains to PostalGold.com

0:22:30 > 0:22:33in the hope they'll quote her a similar figure.

0:22:33 > 0:22:37I have no idea what valuation they're going to give me

0:22:37 > 0:22:40so it's going to be very interesting.

0:22:40 > 0:22:45I've wrapped it all up and I'm going to send it all off and we'll see what happens.

0:22:45 > 0:22:49Later, we'll see what kind of deal Amelia gets offered.

0:22:54 > 0:22:59David Carman took up two deals to help him out of a financial hole

0:22:59 > 0:23:02after injury forced him to give up work.

0:23:02 > 0:23:04One was with a debt management company.

0:23:04 > 0:23:07A second was a loan from an illegal loan shark.

0:23:10 > 0:23:14David paid the loan shark back, but the exorbitant interest rate

0:23:14 > 0:23:18left little for his debt management company.

0:23:18 > 0:23:26I got into further debt because all our money was going to the shark.

0:23:26 > 0:23:30As each week went by, as each payment was made,

0:23:30 > 0:23:36I should have been less depressed but I was getting more depressed,

0:23:36 > 0:23:40worrying about whether we could get it paid off.

0:23:40 > 0:23:43Then, David received a call from his bank.

0:23:43 > 0:23:48They said his debt management company had had to drop him and his debt management plan

0:23:48 > 0:23:51because he hadn't been able to pay the premium for months.

0:23:51 > 0:23:55It meant all his previous creditors were on his back again.

0:23:55 > 0:24:00Within no time at all I was receiving vast amounts of mail,

0:24:00 > 0:24:04all from the creditors, all explaining interest charges

0:24:04 > 0:24:07and I must make a payment or a bailiff will call.

0:24:10 > 0:24:13Totally beyond belief.

0:24:13 > 0:24:16Desperate, and with nowhere else to turn,

0:24:16 > 0:24:20David approached his local Citizens Advice Bureau for help.

0:24:20 > 0:24:25When David first came to see us, he was totally defeated by it all.

0:24:25 > 0:24:29He was just so low when he came in, he was absolutely devastated.

0:24:29 > 0:24:33David was relieved to finally share his financial burdens.

0:24:33 > 0:24:36But the good news didn't last long.

0:24:36 > 0:24:40Looking at his paperwork, the Citizens Advice Bureau showed him

0:24:40 > 0:24:43that rather than helping solve his money worries,

0:24:43 > 0:24:48the debt management company he'd been paying for years, had actually been adding to them.

0:24:48 > 0:24:51David asked for balances to the creditors that he owed money to

0:24:51 > 0:24:56and I think the final straw came when he found out just how much he still owed them.

0:24:56 > 0:25:02With the help of the CAB, David discovered that of the £7,000 he and his wife had paid

0:25:02 > 0:25:06towards their £12,000 debts over the previous ten years,

0:25:06 > 0:25:11only £1,500 had been used to clear their borrowing.

0:25:11 > 0:25:14The rest had gone in fees to the debt management company.

0:25:14 > 0:25:20We didn't realise what the charges would be, which is all hidden away in the small print.

0:25:20 > 0:25:27It was very frustrating because I'd used all my resources, there was nothing I could do.

0:25:27 > 0:25:31Having used every penny he had to try and pay off his debt,

0:25:31 > 0:25:38David now owes nearly £16,000, the same amount that he owed over 10 years ago.

0:25:38 > 0:25:41Because he couldn't afford the bankruptcy fees,

0:25:41 > 0:25:44he's back to the point now where's he's left with debts

0:25:44 > 0:25:50and he's back to basically one option of making token £1 a month offers.

0:25:50 > 0:25:55I've given up worrying about the debts

0:25:55 > 0:26:01because I've tried everything I can and the more I worry, the more stressed I get.

0:26:01 > 0:26:07As the letters come now, I shred them, quite often I don't even open them.

0:26:09 > 0:26:12The combination of a bad deal from a debt management plan

0:26:12 > 0:26:17and exorbitant interest from a loan shark have left David with a debt

0:26:17 > 0:26:21that he'll never be able to pay back.

0:26:27 > 0:26:31Amelia Payne has been testing out the different deals on offer

0:26:31 > 0:26:34to turn you old gold into cash.

0:26:34 > 0:26:41The London Assay Office valued her gold chains at £840.

0:26:41 > 0:26:45High Street jewellers valued it on average around £200 less.

0:26:45 > 0:26:48The online dealers offered her good prices on their websites,

0:26:48 > 0:26:53but to know exactly what you'd get from them, you have to send your gold in.

0:26:53 > 0:26:58Amelia's chosen to send off her gold to be valued by PostalGold.com,

0:26:58 > 0:27:03and now, three days later, there's something in the post for her.

0:27:03 > 0:27:10I have this letter now and the cheque comes to £116.18.

0:27:10 > 0:27:16There is no information telling me how many pieces they received,

0:27:16 > 0:27:19no telling me what sort of gold it was, what carat it was,

0:27:19 > 0:27:24there is literally nothing except for that with a cheque at the bottom.

0:27:24 > 0:27:30It's either a mistake or they've sent the wrong cheque to the wrong person.

0:27:30 > 0:27:33It just can't be right.

0:27:33 > 0:27:38That cheque will definitely go back. It's ludicrous.

0:27:40 > 0:27:46When Amelia called PostalGold.com to say that she wanted to return the cheque,

0:27:46 > 0:27:51they then increased their offer to £185.

0:27:51 > 0:27:54So how do all the valuations compare?

0:27:54 > 0:27:59The London Assay Office valued the gold at £840.

0:27:59 > 0:28:04High street jewellery stores offered to pay on average 25% less.

0:28:04 > 0:28:09The online companies quoted on average 37% less.

0:28:09 > 0:28:15However, PostalGold.com's first offer was only £116.18.

0:28:15 > 0:28:20That's a staggering 85% less than the Assay Office.

0:28:20 > 0:28:23Which? Money Editor James Daley isn't surprised

0:28:23 > 0:28:27by some of the low offers that come from the gold dealers operating via the post.

0:28:27 > 0:28:31The bottom line is you'll get a fraction of what your gold is worth

0:28:31 > 0:28:33if you go through a postal gold company.

0:28:33 > 0:28:37Research has found that these companies

0:28:37 > 0:28:42are generally offering lower prices than you're going to get on the high street.

0:28:44 > 0:28:47Although many postal services are quick and easy to use,

0:28:47 > 0:28:53Which? believe it's vital customers shop around for the best prices.

0:28:53 > 0:28:58Should you be sacrificing 60-70-80% of what you could have got by selling it elsewhere

0:28:58 > 0:29:01just for that convenience, doesn't sound like a fair trade off.

0:29:01 > 0:29:07They're playing on people's lack of understanding and knowledge about what their jewellery is worth.

0:29:07 > 0:29:12PostalGold.com said they regretted that Amelia was not happy with the payment they offered,

0:29:12 > 0:29:16but said any customer that didn't like the amount offered

0:29:16 > 0:29:21had 14 days to consider it with the return of their gold guaranteed.

0:29:21 > 0:29:25They added that their valuation service was entirely free of charge.

0:29:25 > 0:29:29If you're thinking of selling your gold,

0:29:29 > 0:29:32James has some words of advice.

0:29:32 > 0:29:36If you're able to, go around your high street jeweller first

0:29:36 > 0:29:40then maybe try some of the bigger chains. Shop around, that's the point.

0:29:45 > 0:29:47Former policeman Mike Thomas

0:29:47 > 0:29:51is a registered debt counsellor with 17 years' experience.

0:29:51 > 0:29:55He runs a website giving free advice to people with money worries.

0:29:55 > 0:29:57He fights for the consumer rights

0:29:57 > 0:29:59of those that've taken up deals they now regret

0:29:59 > 0:30:02and today, he's on his way to see a woman

0:30:02 > 0:30:05still living with the consequences of her worst deal.

0:30:06 > 0:30:10I'm going to meet a lady today who's in a bit of a pickle.

0:30:10 > 0:30:14She's got a debt from the 1990s, I believe,

0:30:14 > 0:30:17and I think it's a lot of money, I think it's over £25,000.

0:30:19 > 0:30:23For many people in the UK, the only way they can afford a mortgage

0:30:23 > 0:30:26is by buying with a partner or friend.

0:30:26 > 0:30:28But when that relationship breaks down

0:30:28 > 0:30:31and mortgage payments can't be met, it's only a matter of time

0:30:31 > 0:30:34before repossession comes knocking at the door.

0:30:36 > 0:30:39That's exactly what happened to Alison Chisholm in Croydon.

0:30:39 > 0:30:44She went through the misery of having her home repossessed back in 1996.

0:30:45 > 0:30:48And I'm probably the happiest I've ever been now

0:30:48 > 0:30:51and...it's come back to haunt me.

0:30:51 > 0:30:56Alison now lives with her partner and three-year-old daughter, Grace.

0:30:56 > 0:30:59Life may look rosy, but a never-ending debt

0:30:59 > 0:31:01is spoiling their lives.

0:31:01 > 0:31:05I bought a flat in 1991

0:31:05 > 0:31:08because I had been with a guy for a couple of years

0:31:08 > 0:31:11and we'd got engaged the previous year,

0:31:11 > 0:31:15so we decided that it was high time we moved in together.

0:31:15 > 0:31:18This picture was taken in the flat Alison used to own,

0:31:18 > 0:31:20but not long after it was taken,

0:31:20 > 0:31:24her relationship with her partner hit the rocks.

0:31:24 > 0:31:29About a year and half later, it all ended

0:31:29 > 0:31:33and I was left in the flat on my own with a mortgage.

0:31:33 > 0:31:39Alison managed to meet repayments by herself for a further four years,

0:31:39 > 0:31:42then the cost became too much to bear.

0:31:42 > 0:31:43I just had to leave

0:31:43 > 0:31:46because I couldn't afford to pay it on my own any more.

0:31:47 > 0:31:51So I took myself into the mortgage company

0:31:51 > 0:31:54with my keys and gave them back.

0:31:54 > 0:31:58Alison thought handing back the property to the mortgage company

0:31:58 > 0:31:59would be the end of it.

0:31:59 > 0:32:03She moved away from the area, and put it all behind her.

0:32:03 > 0:32:06In time, she met a new partner, Gerald,

0:32:06 > 0:32:08and the couple were keen to get married.

0:32:08 > 0:32:13But in 2009, her old flat came back to haunt her.

0:32:13 > 0:32:16I came back from maternity leave,

0:32:16 > 0:32:19glad to get my first pay packet for a few months

0:32:19 > 0:32:25and I noticed that there had been an amount of money that was taken out.

0:32:26 > 0:32:31Unbeknownst to Alison, the bank had sold her old flat at a loss

0:32:31 > 0:32:33and 12 years on had tracked her down.

0:32:33 > 0:32:37They were now chasing her for the money.

0:32:37 > 0:32:41The shortfall had been £12,000 back in 1997

0:32:41 > 0:32:47but with interest and solicitors' fees on top, Alison owed £30,000.

0:32:47 > 0:32:51She had a debt which she never even knew existed.

0:32:51 > 0:32:55They can't find my partner that I took the mortgage out with,

0:32:55 > 0:32:58so I'm the sole person who is responsible

0:32:58 > 0:33:01for paying the money back, which is completely unfair

0:33:01 > 0:33:03because we both signed the mortgage agreement.

0:33:05 > 0:33:09Desperate to move forward in her life and be debt free...

0:33:09 > 0:33:13- Hello, Alison. I'm Mike.- Hi, there. - Pleased to meet you.- Hi.

0:33:13 > 0:33:15..but with nowhere else to turn,

0:33:15 > 0:33:18she called in Mike for some professional debt advice.

0:33:18 > 0:33:23- You've been dumped on. - I have. By a huge height.

0:33:23 > 0:33:25How do you feel about that?

0:33:25 > 0:33:29I don't feel very good about it at all,

0:33:29 > 0:33:32because I can't move on, I can't move house...

0:33:32 > 0:33:35If we wanted to, I can't get married.

0:33:35 > 0:33:39So are you telling me that this is affecting your relationship,

0:33:39 > 0:33:43- i.e. you won't get married because of the debt?- No, I won't.

0:33:43 > 0:33:44- It's horrendous.- It is.

0:33:44 > 0:33:48- Well, I tell you what, I've got a job to do here.- OK.

0:33:48 > 0:33:51The job is I've got to get you married at some stage in the future.

0:33:51 > 0:33:52We've got to find a way.

0:33:53 > 0:34:00Of the £30,000 she owes, Alison has paid back £17,000.

0:34:00 > 0:34:03She's had to rely on her partner for financial help

0:34:03 > 0:34:04with paying off the debt

0:34:04 > 0:34:06because she can't afford to pay it on her own.

0:34:06 > 0:34:10He's contributing about £200 a month towards your living expenses.

0:34:10 > 0:34:13Mike calls the bank solicitor who's been chasing Alison for the debt.

0:34:13 > 0:34:16Good afternoon. My name's Mike Thomas.

0:34:17 > 0:34:19What Mike knows and Alison doesn't know,

0:34:19 > 0:34:22is that banks can be negotiated down

0:34:22 > 0:34:25and that they do accept offers.

0:34:25 > 0:34:29My client Alison's income compared to her expenditure before she pays you,

0:34:29 > 0:34:31she's overspending by £200 a month

0:34:31 > 0:34:34so there's no money available to pay you.

0:34:34 > 0:34:36Due to the nature and the length of this case,

0:34:36 > 0:34:40would you consider ending the arrangement and writing the debt off?

0:34:42 > 0:34:43That would not be an option?

0:34:43 > 0:34:48The solicitors might not be happy to write off Alison's debt,

0:34:48 > 0:34:52but Mike's optimistic and determined to give them a run for their money.

0:34:52 > 0:34:54Well. I've got a job to do.

0:34:54 > 0:34:57I think I can get rid of these guys for a small lump sum.

0:34:57 > 0:35:01Later, we'll see if Mike can negotiate a deal

0:35:01 > 0:35:03so Alison can be rid of her debt.

0:35:09 > 0:35:11With High Street lending

0:35:11 > 0:35:14increasingly hard to come by these days,

0:35:14 > 0:35:18it's no wonder that one deal that's currently booming in Britain

0:35:18 > 0:35:19is doorstep lending.

0:35:19 > 0:35:23Licensed doorstep lenders are legal.

0:35:23 > 0:35:26However, recently they've come in for heavy criticism

0:35:26 > 0:35:29from many MPs for the high rates they charge

0:35:29 > 0:35:31for lending small sums of money.

0:35:31 > 0:35:34Doorstep lending is aimed at people on low incomes

0:35:34 > 0:35:35who are too much of a risk

0:35:35 > 0:35:38for mainstream lenders to offer credit to.

0:35:38 > 0:35:43They offer small loans, typically anything from £50 to £500.

0:35:43 > 0:35:45It's called doorstep lending

0:35:45 > 0:35:49because people will literally knock on the door and offer you a loan.

0:35:49 > 0:35:51People will lend you money

0:35:51 > 0:35:54and you'll pay back a certain amount each week.

0:35:54 > 0:35:57If you are on a low income with a bad credit rating,

0:35:57 > 0:35:59you might think doorstep lending is your only option

0:35:59 > 0:36:02to get the cash you need quickly.

0:36:02 > 0:36:05Come on, then, Ryan! Yay!

0:36:05 > 0:36:07Come on, then!

0:36:07 > 0:36:10It's certainly what Debbie Smart from Gravesend in Kent thought

0:36:10 > 0:36:13when she fell into financial troubles.

0:36:13 > 0:36:16I thought I was stuck in a situation

0:36:16 > 0:36:19that was going to last quite a long while,

0:36:19 > 0:36:21and wasn't happy with my health.

0:36:23 > 0:36:25As a single mum, off work,

0:36:25 > 0:36:28suffering from depression and living on benefits,

0:36:28 > 0:36:31Debbie constantly struggled to juggle her finances.

0:36:31 > 0:36:35Literally, the money I had was for basic living,

0:36:35 > 0:36:38was for food, was for electric and gas

0:36:38 > 0:36:41and there was no extra money left at the end of it.

0:36:41 > 0:36:44I was getting very depressed.

0:36:46 > 0:36:48But due to a previous bankruptcy,

0:36:48 > 0:36:51getting hold of cash from any of the big high-street lenders

0:36:51 > 0:36:53just wasn't an option for Debbie.

0:36:53 > 0:36:57Instead, she was tempted into contacting a loans company

0:36:57 > 0:37:00who'd recently been leafleting her area.

0:37:00 > 0:37:02It was about getting a loan.

0:37:02 > 0:37:06It was, like, bullet pointed that, you know, "CCJs accepted,

0:37:06 > 0:37:08"no problems for bankruptcies."

0:37:08 > 0:37:13Debbie had previously taken out small loans from doorstep lenders,

0:37:13 > 0:37:15but been able to pay them back.

0:37:15 > 0:37:21This time, however, she accepted a £500 loan from a doorstep company

0:37:21 > 0:37:23and she struggled to scrape together

0:37:23 > 0:37:25the £20 weekly repayments she needed.

0:37:25 > 0:37:31I'd got myself into such a cycle with them, I was in a state.

0:37:31 > 0:37:35It was never-ending and I could not see a way out of it.

0:37:35 > 0:37:39On top of this, the high interest rates on the loan

0:37:39 > 0:37:43began to catch up with her, forcing Debbie into deeper and deeper debt.

0:37:43 > 0:37:48I started to panic, realising that I was in this now

0:37:48 > 0:37:52until all those weeks have gone by and the payments had been made

0:37:52 > 0:37:55and the loans cleared and finished.

0:37:55 > 0:38:01In just over a year, Debbie had borrowed a total of £1,350.

0:38:01 > 0:38:06But with an APR 20 times that of a typical credit card,

0:38:06 > 0:38:09she owed over £2,200.

0:38:09 > 0:38:13Even after a year of paying back £20 a week,

0:38:13 > 0:38:17she felt she'd never be able to pay it all off.

0:38:17 > 0:38:20I was out of control, I had no control over it.

0:38:20 > 0:38:23If I hadn't have got these loans out, this would have been spare cash

0:38:23 > 0:38:26that I could have treated myself and Ryan to.

0:38:27 > 0:38:30Debbie had no idea how to get out of this situation.

0:38:30 > 0:38:34It wasn't until she was helping at her local family centre

0:38:34 > 0:38:39that she found out about a new credit union opening in her area.

0:38:40 > 0:38:44Credit unions are non-profit-making financial co-operatives

0:38:44 > 0:38:47that offer low-interest loans to people on low incomes

0:38:47 > 0:38:50or with difficult credit histories.

0:38:50 > 0:38:52For many people on low incomes,

0:38:52 > 0:38:57they offer a better value alternative to the doorstep lenders.

0:38:57 > 0:39:01The maximum loan interest we can charge is 26.8%,

0:39:01 > 0:39:03it's the equivalent of a credit card.

0:39:03 > 0:39:06Sadly, Debbie's case worker, John,

0:39:06 > 0:39:10sees many families falling into the doorstep-lending trap.

0:39:10 > 0:39:11A lot of the people who come to us

0:39:11 > 0:39:16have been with those sort of lenders for a long time

0:39:16 > 0:39:20and are finding that the moment their income comes in

0:39:20 > 0:39:22they've got to pay almost all of that income

0:39:22 > 0:39:25to pay off the loan that they owe, then they have to borrow more

0:39:25 > 0:39:29and it just goes on and on and on. It's a spiral.

0:39:34 > 0:39:36Fortunately for Debbie, John was able to offer

0:39:36 > 0:39:40a low-interest loan to help her clear her debts.

0:39:40 > 0:39:43It was such a relief to actually have someone

0:39:43 > 0:39:48that could, basically, talk through things with me,

0:39:48 > 0:39:50it helped me and made me feel better straightaway.

0:39:51 > 0:39:54Debbie feels that at the time when she was most vulnerable

0:39:54 > 0:39:58and desperate for money, she had no other way to support her son,

0:39:58 > 0:40:03but with the experience taking its toll both physically and mentally,

0:40:03 > 0:40:07she's glad this chapter in her life has finally been closed.

0:40:07 > 0:40:11I started to feel control coming back,

0:40:11 > 0:40:12I can't explain the feeling

0:40:12 > 0:40:15it felt like I was escaping and starting to get out of

0:40:15 > 0:40:18the hole I had dug myself.

0:40:18 > 0:40:21That's the walking bit. Oh, thank you. Bye!

0:40:26 > 0:40:30Alison Chisholm had her flat repossessed in the mid-90s

0:40:30 > 0:40:33after being unable to afford the mortgage.

0:40:33 > 0:40:37After handing back the flat keys, she thought that was the end of it.

0:40:37 > 0:40:40But 12 years later, her bank came after her.

0:40:40 > 0:40:42They'd sold her old flat at a loss

0:40:42 > 0:40:45and wanted her to pay the difference.

0:40:45 > 0:40:50She's now paid off £17,000 of the £30,000 the bank wants,

0:40:50 > 0:40:55but she's still got a further £13,000 to pay off.

0:40:55 > 0:40:56Having met with Alison,

0:40:56 > 0:40:59registered debt counsellor and former police officer Mike Thomas

0:40:59 > 0:41:03has been on the phone to her mortgage company.

0:41:03 > 0:41:06She's agreed for him to negotiate with them directly.

0:41:06 > 0:41:10It's taken long phone calls, and some serious persistence...

0:41:10 > 0:41:12My client settles the account, you go away,

0:41:12 > 0:41:15and you don't write to my client any more.

0:41:15 > 0:41:20..but now Mike's back at Alison's with the results of his hard work.

0:41:20 > 0:41:24- How are we doing?- Good. Very good. - Yeah, not so bad.

0:41:24 > 0:41:28Well, I'm pleased to say that I'm actually getting somewhere.

0:41:28 > 0:41:31- Now, their claim is just over £13,000.- OK.

0:41:31 > 0:41:33What I've managed to do is get it down to £3,000.

0:41:33 > 0:41:35- Wow.- Wow.- That's really good.

0:41:35 > 0:41:38- I've actually got the letter there for you.- OK.

0:41:39 > 0:41:44Fortunately for Alison, her mum will be able to help her pay

0:41:44 > 0:41:49this final bill, leaving her, at long last, debt free.

0:41:49 > 0:41:52Seeing it in black and white, it's absolutely amazing.

0:41:53 > 0:41:55£3,000.

0:41:55 > 0:41:59- Wow. Big sigh.- Oh, it's been good having you fighting our corner.

0:41:59 > 0:42:02Absolutely amazing, and I'm really, really chuffed.

0:42:02 > 0:42:07- I can see that.- Yeah. Really chuffed. - Well, good.- So thanks very much.

0:42:07 > 0:42:10- You're going to get hitched? - Yeah. Hopefully.

0:42:10 > 0:42:12GERALD LAUGHS

0:42:12 > 0:42:15Gerald is a man of not many words.

0:42:15 > 0:42:18THEY LAUGH

0:42:18 > 0:42:20Having experienced her worst deal

0:42:20 > 0:42:24and having had the debt haunting her for over 15 years,

0:42:24 > 0:42:28Alison can finally move on with her life.

0:42:34 > 0:42:37Subtitles by Red Bee Media Ltd