Not upheld: irresponsible lending and affordability assessment complaint against Freemans Public Limited Company

Decision detail

Summary

Miss B complained that Freemans lent to her irresponsibly by failing to conduct proper affordability checks before opening a £100 credit account in July 2024 and subsequently increasing the limit to £400 by February 2025. She argued the account was unaffordable given her reliance on benefits income and her undisclosed mental and physical health vulnerabilities. Freemans rejected the complaint, stating their checks were proportionate and compliant with FCA guidelines. The ombudsman found that Freemans' credit checks were adequate, revealing low debt levels and good credit management despite some historic financial difficulties, and that each credit limit increase was justified by Miss B's positive repayment history and stable financial position. The ombudsman concluded that nothing in the available information would have alerted Freemans to Miss B's vulnerabilities, and therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Freemans' affordability checks were proportionate to the circumstances. The credit check revealed low debt levels, good credit management, and only historic signs of financial difficulty (default over a year old, insolvency over three years old). The initial £100 limit was modest with an expected minimum payment of around £5, which Miss B could afford. Each credit limit increase followed positive repayment history with no new adverse information, making the increases reasonable. Although Miss B has health vulnerabilities, she did not disclose these at the time, and nothing in the available information would have alerted Freemans to require additional checks. The lending relationship was not unfair under section 140A of the Consumer Credit Act 1974.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website