Not upheld: Mortgage administration / arrears handling complaint against Shop Direct Finance Company Limited trading as Very

Decision detail

Summary

Ms G complained that Very failed to offer forbearance during financial difficulty caused by income decline, claiming she was not properly notified of the default or debt sale. Ms G offered £30 monthly payments on approximately £400 in arrears. Very declined, citing that this would take over 16 months to clear and that Ms G's I&E assessment showed insufficient disposable income. Very issued a default notice at four months in arrears and passed the debt to a third party. The ombudsman upheld Very's position, finding the payment offer unreasonable, the default notice compliant with guidance, and that the debt purchaser was responsible for notifying Ms G about the sale.

The Ombudsman's reasoning

The ombudsman applied FCA CONC 7.3.4R and 7.3.5G, which require firms to treat customers in arrears with forbearance and due consideration. However, the ombudsman found that a 16-month repayment period was unreasonable and that Very's I&E assessment showed Ms G lacked sufficient disposable income to maintain any plan. The ombudsman noted Ms G was managing priority bills and other creditors but refused support from a debt charity. The default was issued at four months in arrears, in line with ICO guidance (3-6 months). The ombudsman agreed with the investigator that the debt purchaser, not Very, was responsible for notifying Ms G about the debt sale under FCA CONC 6.5.2.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website