Not upheld: Irresponsible lending complaint against FREEMANS PUBLIC LIMITED COMPANY

Decision detail

Summary

Mr D complained that Freemans acted unfairly by agreeing a catalogue account with an initial £200 limit and three subsequent increases (to £400, £600, and £800) which he could not afford to repay. The investigator upheld the complaint in relation only to the third increase to £800 in August 2022, finding Freemans had not completed proportionate checks. The ombudsman agreed that proportionate checks were not completed, particularly given Mr D already had a £750 limit on another group account, but did not uphold the complaint because Mr D failed to provide information about his income and expenditure at the time, which was necessary to establish what proportionate checks would have revealed. The ombudsman rejected arguments based on credit utilisation and indebtedness figures as insufficient evidence of unaffordability.

The Ombudsman's reasoning

The ombudsman agreed that Freemans failed to complete proportionate checks at the time of the third credit limit increase, particularly given Mr D already had a £750 limit on another account within the group. However, the ombudsman could not uphold the complaint because Mr D failed to provide information about his income and expenditure at the time of the increase, which was necessary to establish what proportionate checks would have revealed. The ombudsman rejected arguments based on credit utilisation and indebtedness figures, noting the high indebtedness was largely attributable to recent car finance rather than financial struggle, and that a combined limit of £1,750 across the group was not sufficient to demonstrate unaffordability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website