Not upheld: irresponsible lending / proportionate affordability checks complaint against Shop Direct Finance Company Limited trading as Very

Decision detail

Summary

Mr B complained that Very acted irresponsibly by opening a catalogue shopping account and increasing his credit limit without proportionate affordability checks, given his worsening financial position and increasing reliance on credit. His credit limit was increased from £400 to £900, £1,000, and £2,000 between February 2024 and December 2025, though he never utilised above £900. The ombudsman found that Very's checks for account opening and the first increase to £900 were fair and reasonable, as the lending was modest, Mr B's account was well-managed with no missed payments, and proportionate checks revealed sufficient disposable income of approximately £750 monthly. The subsequent unused increases were not investigated. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for proportionate checks based on the type, amount, duration and total cost of credit and the borrower's circumstances. For the £400 account opening, the modest lending amount and low repayments required made the checks proportionate. For the £900 increase, while the ombudsman found the checks weren't fully proportionate, they concluded that reasonable checks would have shown sufficient disposable income (around £750 monthly) to afford the lending. The ombudsman noted Mr B's account was well-managed with no missed payments, the CRA data showed external credit was well-managed, and the lending amount was relatively modest. The ombudsman did not consider it proportionate to require bank statements or detailed credit file review given these factors. The subsequent increases were not utilised so no loss occurred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website