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EVERY week, Tony Hetherington replies to readers' letters, adding comments, advice and the results of his inquiries.
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If you think you are a victim of financial mismanagement, or want advice before investing, write to Tony Hetherington, Financial Mail, 2 Derry Street, London W8 5TS.
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S. L. writes: I received what seemed to be a birthday card last week, with a note asking me to phone 'Pat'. On phoning, the person at the other end asked me to confirm my address, and then I received a threatening letter from Oxford (Servicing) Limited, demanding money for subscriptions allegedly due to the TV company Sky.
We have had no contact with Sky since July 1999 and I am sure that if there had been any dispute it would have been in touch before now. I do not owe Sky any money.
THE 'birthday card' was just a cheap and sneaky way of getting you to confirm your identity and address, and to pay for the phone call to do so.
Oxford (Servicing), a debt collecting firm in Hertfordshire, told me: 'We are members of the Credit Services Association, who have strict rules of membership, including a code of practice to which we strictly adhere.'
Sky says it hired Oxford to recover money it claims is still owed from its old analogue service before it went digital. Your name is on the list supplied to Oxford, so you must challenge the accuracy of Sky's records by checking your 1999 bank statements.
As for Oxford, I was surprised to find that a company that makes its living by telling other people to honour their obligations is itself breaking the law.
When I carried out a check at Companies House, I found it has submitted no accounts since it was set up in February 2000. Accounts due by October 31 last year still haven't arrived.
This is illegal - and at least one of Oxford's directors should know better. He is solicitor David Anthony Steene, well known in what is diplomatically called the 'non status' moneylending industry.
For about four years until 1998, Steene was managing director of City Mortgage Corporation, which specialised in offering mortgages to people whose low incomes or previous financial problems meant that mainstream lenders turned them down.
The catch was that they could sign up with Steene for a mortgage at 9.9%, but if they were hit by redundancy, sickness, unemployment or anything else that forced them into arrears, Steene's response would be to bang the interest rate up to 18%. As a result, hundreds of families faced repossession proceedings.
On the other hand, if your finances improved and you qualified for a normal loan elsewhere, Steene would lock you into your CMC mortgage by imposing huge exit penalties. Once you were in his clutches, the chances were that you stayed there.
It was only after the Office of Fair Trading denounced his extortionate tactics as 'oppressive' that Steene backed down. And days after the OFT under director-general John Vickers forced City Mortgage Corporation to behave, he quit.
But despite the strong language used by the Office of Fair Trading to denounce Steene's business methods as 'unacceptable', it clearly has a forgiving nature - or a short memory.
For Oxford (Servicing) Limited is fully licensed as a debt collector by . . . the Office of Fair Trading.
Commodity trader that operates like a scrap metal dealer
R. M. L. writes: I was cold-called by Capital Asset (Scotland) in Edinburgh, inviting me to invest in commodities and/or currencies. From the brochure it looks above board, but it does not appear to be authorised by the Financial Services Authority.
THERE is less to Capital Asset than meets the eye. It looks like an investment company - its literature talks about trading in metals and the significant profit potential of currency markets.
But the truth is that it is more like a scrap metal dealer than a commodity trader, and more like a bureau de change than a currency broker.
The Financial Services Authority regulates 'paper' transactions involving stocks and shares, life policies and so on. It does not regulate deals in which investors can take physical possession of their purchases, which is why FSA officials don't hang round Sotheby's or Christie's, even though buyers might invest huge sums in art or antiques.
This is how Capital Asset sidesteps the investor protection laws. Put your cash into ten tonnes of copper and in theory you could collect it from a warehouse. Nobody really expects you to, but it is enough to turn Capital Asset's salesmen into scrap dealers in suits.
The same applies to currencies. Regulation applies only to the futures markets, where you bet that by a particular date the yen, the dollar or whatever will have moved up or down by a particular amount. But if you put your pounds into Swiss francs with Capital Asset, that's what you get, just as though you had ordered them from your travel agent for your ski trip.
I suspect the firm makes much of its profits from moneylending. Investors can put down up to 20% in cash and Capital Asset's finance arm lends the rest. So whether an investment rises or falls, Capital Asset charges fees and interest.
Anyone using this scheme should watch not just the prices of metals or currencies, but also the borrowing costs, which might make it hard to make a profit.
Tea machine doesn't work but I must still pay for it
I. L. writes: I ordered a hotdrinks vending machine, which I was told I had to lease. The salesman said that if I was not satisfied, the machine could be removed at three months' notice. The machine did not work satisfactorily, but when I contacted the vending company it had ceased trading.
First National Business Equipment Leasing then said that while I could cancel the contract with the vending company, I could not cancel the leasing agreement. So this means I must pay for a useless machine.
ABBEY National, which owns First National, says you approached it through a broker with a request for leasing finance and the vending company was never its agent, which distances the bank from any responsibility.
But it accepts that you can't look to the vending firm to fix the machine, which is more than a little frustrating. So, although on paper £1,824 is outstanding under the leasing agreement, it will accept £1,000 in full settlement, and you have agreed. A fair compromise.
RBS honours card loss
G. G. writes: I bought my house cover from Independent Insurance for £224. Independent then went broke and I had to pay a further £199 to Legal & General for the same cover.
Both payments were made by Royal Bank of Scotland credit card. I wrote to the bank claiming under the Consumer Credit Act, but I have received no reply.
THE Consumer Credit Act makes credit card firms jointly liable if a company goes out of business or fails to deliver goods the cardholder bought.
The failure of Independent Insurance is a clear-cut example.
Independent failed to provide insurance cover because it went bust, and for the same reason it was in no position to offer a refund. That leaves RBS to pick up the pieces.
The bank admits it received your letter, but it was passed to the wrong department and was never followed up. An official told me: 'I can only apologise. I can assure you this is below the level of service we seek to provide.'
By the time you read this, your Royal Bank card will have been credited with the £199 it cost to replace your policy. And as a gesture of apology, the bank is adding a further £100.
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