Not upheld: irresponsible lending and poor customer service complaint against Hutchison 3G UK Limited trading as Three

Decision detail

Summary

Mr R complained that Three lent to him irresponsibly by providing 10 credit agreements for mobile phone handsets between July 2023 and February 2024, totalling £12,035 with monthly repayments of approximately £300. He argued that Three failed to conduct proper affordability checks and did not make clear he was entering into new credit commitments. The ombudsman found that while the lending pattern raised concerns about cumulative affordability, the interest-free nature of the agreements meant Mr R was already in the position required under the FOS standard remedy for irresponsible lending. As Mr R had received the benefit of the handsets and could not return them, the ombudsman declined to order financial compensation beyond the £50 already offered for customer service issues. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS standard approach to irresponsible lending cases, which typically requires a lender to refund interest and charges if credit was provided irresponsibly. However, because all agreements were interest-free, Mr R was already in the capital position he would be placed in under the standard remedy. The ombudsman found no strong reason to depart from this standard approach. Critically, the ombudsman reasoned that Mr R had received the benefit of the handsets and could not return them, meaning he was in a better position than before taking out the credit. The ombudsman rejected the argument that Mr R should be relieved of repayment obligations simply because the lending may have been irresponsible, as this would not account for the value he received from the goods.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website