KATIE MORLEY INVESTIGATES

CONSUMER CHAMPION OF THE YEAR If a company has let you down, Katie is here to fight your corner

LETTER OF THE WEEK I invested £14,000 for my son and Aviva lost it

In 1989 I took out two Norwich Union endowment policies for my two young children, a boy and a girl. They were due to mature in 2036.

By January this year the value of the policies had grown substantially. My children, who are now grown up and both married, could really do with the cash. So I contacted Norwich Union, now Aviva, and we agreed a cash-in price of £13,350 for my daughter and £13,900 for my son. It sent some forms for me to fill in. We sent everything off in a single large envelope, which I addressed to Aviva. It acknowledged receipt. But then it did something strange. It returned both my daughter and son’s identity documents back to my daughter.

Then Aviva said it could not find my son’s policy. I have chased and so far nothing has happened. Aviva’s telephone service is nonexistent and my letters to it have gone unanswered. I cannot believe it has been so incompetent.

MS, VIA EMAIL

For more than 30 years you have been diligently squirrelling away money for your children to provide them with a financial cushion. You saw this as your fatherly duty, which I can see you take pride in fulfilling.

Given that the policies were not due to mature until 2036, I was a little surprised to see that you were cashing them in early. Usually it pays to wait. However, you told me your daughter sadly has an incurable brain tumour and her future is uncertain. She is currently unable to work and, on top of her health worries, she has recently been ripped off by a rogue builder to the tune of thousands of pounds. So she really needs the money. You also said the so-called “cash-in” value of the policy had soared by about 50pc recently, which helped your decision.

The good news is that after I raised your case with Aviva it miraculously found your son’s policy. It said that after you posted both your children’s documents in the same envelope, a “processing error” occurred, which led to your son’s policy getting lost. It has paid your children £170 each to say sorry for sending your son’s documents to your daughter, as this constituted a breach of privacy.

A sum of £550 has also been added to your daughter’s policy to take it to the same value as your son’s. Another “error” meant it was smaller, despite you having paid the same sums into each policy. Aviva has apologised and paid you £50 for the inconvenience. You are delighted with this outcome, and I wish your family all the best.

Write to Katie Morley, Telegraph Money, The Daily Telegraph, 111 Buckingham Palace Road, London SW1W 0DT

Please do not send original documents. Include an address, phone number and separate notes addressed to all organisations authorising them to talk to Katie. For full terms see p7 or visit telegraph.co.uk/go/ consumerchampion. You can also email kminvestigates@ telegraph.co.uk

My partner and I have just applied for a mortgage to buy our first home together, but we have encountered a problem. I recently discovered I fell victim to a fraud in 2014, which has left a stain on my credit rating. It means the lender won’t give us the best deal on the £265,000 mortgage we want to take out.

The fraud only came to light after I moved to the address at which we currently live. I received a letter from a debt collection company demanding payment for a pair of £30 sandals that had been ordered and not paid for from the Next catalogue. I did have a Next catalogue account, but I did not order the sandals. In the six years I have lived at my current address, my Next account has not been used.

I phoned Next customer services and it was no help at all. The debt managers see me as guilty unless I can prove my innocence. Our new life together is going to be so much more expensive through no fault of my own.

ANON

Next catalogue order could scupper my mortgage

It seemed very unfair that this socalled “credit default” over a pair of £30 sandals was going to prove so costly. I was intrigued to know how much your mortgage broker thought this stain could add on to the cost of the loan. You said it was about 1pc of the total £265,000 mortgage, which could add up to thousands of pounds in higher payments over the term.

I decided to speak to your mortgage broker about your loan application, and he filled me in with a few more details. He revealed that you’d been struggling to get accepted for a mortgage at all, as your credit rating was rather on the low side. This wasn’t just as a result of the incident with the Next sandals, he said. I got the impression there had been other problem debts. It emerged that your view that the mortgage was being made more expensive by this credit default was muddled. It was more a case of you being accepted for a mortgage or not. With a credit score like yours, the best deals would be out of reach, it seemed. In the context of this, the debt resulting from the Next sandals, which had now climbed to £37.50, seemed irrelevant. You only had to pay to make it go away.

In the meantime, I had asked Next to investigate your complaint. According to its records, your credit account first fell into arrears in July 2011. You claimed not to have received your statements, it said, so the £7.50 fine that it had applied to your account was removed as a goodwill gesture. Shortly after this, the balance was cleared.

You say you hadn’t used the account for six years, but this has also been disputed by Next. In July 2014 two women’s dresses were ordered for £100 via your online account for collection at the store, it told me. Both dresses were subsequently returned. According to your version of events, these dresses must have been ordered by the fraudster. However, I find it highly improbable that any fraudster in their right mind would hijack your account and then go to the trouble of returning the dresses. They would not have been able to obtain a cash refund for them.

It was only a month after this, in August 2014, that the sandals were purchased via your account. Like the dresses, they were also ordered online and delivered to a store. But this time they were either deliberately or accidentally stolen, as they were not returned or paid for.

Based on everything I have learned about your case, I do not believe you have been a victim of fraud as you have alleged. It seems more likely to me that the dresses and the sandals were ordered by you. Due to the low value of the sandals, I think you either didn’t notice or thought you could get away without paying for them. You haven’t let me know whether or not you managed to get a mortgage, but in all honesty I would question whether you are really ready to take on such a big financial commitment. Failing to pay your Next catalogue balance is one thing, but if you were to default on your mortgage, it would be quite another.

As far as I can see Next has done nothing wrong, yet you were prepared to drag its name through the mud in a national newspaper. You have been sparing with the truth throughout this process, and although it’s no excuse, I am prepared to believe you are in denial about your problematic relationship with money. The best advice I can offer you is to stop blaming others for your problems and be honest with yourself. None of us is perfect. But if you take a look in the mirror, accept your flaws and admit your mistakes, you might find you feel a weight has been lifted.

Follow Katie on Twitter: @katiemorley_