Not upheld: irresponsible lending and credit limit increases complaint against Frasers Group Financial Services Limited trading as Studio

Decision detail

Summary

Mr S complained that Studio lent to him irresponsibly by providing a mail order credit account and increasing his credit limit seven times over seven years, despite his financial difficulties and medical conditions affecting his ability to manage finances. Studio rejected the complaint, arguing their checks were proportionate and lending decisions fair. The ombudsman found that Studio's affordability assessments were proportionate, Mr S consistently managed the account well with regular payments and underutilized credit, and there was no visible evidence of financial difficulty to Studio at the time of lending or increases. Although Mr S's vulnerability and actual struggles were acknowledged, they were not apparent to Studio until his December 2025 complaint, so the lender could not have reasonably known to conduct additional checks or decline lending. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA Consumer Credit Sourcebook (CONC) rules requiring proportionate affordability assessments. The checks must be borrower-focused and proportionate to the specific circumstances. For account opening, the initial credit limit was modest and Mr S's credit management appeared positive. For credit limit increases, Studio reviewed both internal and external data, and Mr S consistently managed the account well, made regular payments, and did not use available credit to its limits. Although Mr S may have been struggling, this was not evident to Studio from the information available at the time. The ombudsman found nothing to suggest Studio could have reasonably known of Mr S's vulnerability before December 2025.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website