Not upheld: irresponsible lending / unaffordable credit complaint against Shop Direct Finance Company Limited trading as very

Decision detail

Summary

Ms M complained that Shop Direct Finance Company Limited trading as very provided her with unaffordable credit through a catalogue shopping account opened in November 2010 with an initial £3,000 limit, which was increased multiple times through May 2016. Very was unable to provide evidence of the checks it performed before lending or when increasing credit limits, and Ms M could not provide information about her financial circumstances at the time. The ombudsman found that without evidence demonstrating Ms M was likely unable to sustainably repay the credit, the complaint could not be upheld. The ombudsman also rejected using subsequent lending decisions as evidence of a pattern of irresponsible lending. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman applied the FOS general approach to unaffordable or irresponsible lending complaints. Due to the significant time elapsed between the lending decisions (2010-2016) and the complaint, neither party could provide sufficient evidence. Very could not evidence what checks were performed or their results, and Ms M could not provide information about her financial circumstances at the time. Without evidence that Ms M was likely unable to sustainably repay the credit, the ombudsman could not find the lending was unfair. The ombudsman also rejected using subsequent lending decisions as evidence of a pattern of irresponsible lending, as circumstances can change and prior decisions must be assessed independently. The ombudsman further considered the relationship under s.140A of the Consumer Credit Act 1974 but found no basis for a different outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website