When Home Shopping Credit Goes Wrong

Very, Littlewoods, Kays – they’re all part of The Very Group. These home shopping credit accounts let you buy now and repay later, spreading the cost over time.

But what happens when credit limits are increased without adequate checks? What happens when warning signs that a customer might be struggling are potentially overlooked?

In some cases, customers have found themselves in debt that could have been avoided with better lending decisions.

Warning Signs That May Have Been Missed

🚨 Multiple Payday Loans – A Potential Red Flag

If you were taking out multiple payday loans while having a Very account, this could indicate financial difficulty that should have been considered before increasing credit limits.

The Financial Ombudsman has highlighted concerns about this in some cases:

“However there is some recent history of payday lending and short term instalment loans – at least six in the six months before the increase. These kinds of loans are intended to address very short term cash flow issues so the frequency of these ought to have been a cause for concern – especially in light of what SDFC already knew about Mr G’s repayment history with it. So in summary, there’s not much to suggest Mr G was managing his account well, he had a fairly recent history of quite significant limit decreases and there were signs of back to back short term loans. Taken in the round, I think SDFC should’ve been having a closer look at Mr G’s situation before agreeing to give him more credit.”

If similar circumstances apply to you, you may be entitled to Very refunds.

🎰 When Gambling Affects Affordability

In some cases, Very has argued that customer gambling habits are not relevant to lending decisions. However, the Ombudsman has disagreed in certain circumstances:

“Very says that Mr R’s gambling spend is irrelevant because its credit couldn’t be used for gambling. From what I’ve seen Mr R’s spending on gambling was regular and sustained and was likely impacting on the money he had available to meet his repayments and would do so going forward. So I can’t agree that it was irrelevant in this case.”

The Ombudsman also noted:

“Very also said that based on its checks any difficulties Mr R had repaying credit was down to his poor money management and not his lack of means. By this I understand the lender to mean that that Mr R was earning enough to afford to repay a higher level of credit but that his spending patterns meant that he wouldn’t have enough disposable income left to meet his repayments. As I’ve explained, I think Very would likely have learnt this through further checks and not increased Mr R’s limit in December 2015.”

If gambling affected your ability to repay and this wasn’t properly considered, you might have valid Very catalogue claims.

📊 Questions About Affordability Calculations

There have been instances where affordability assessments may not have captured the full picture:

“I’d noted that Shop Direct had told this Service that Ms H’s credit commitments were £61. But as its credit check referred to her having six loans, with a loans balance totalling £1,909 and a £7,000 credit limit, I thought it might have reasonably thought that Ms H’s monthly credit commitments might have been somewhat higher than £61. The credit check also didn’t show how much of her £7,000 credit limit Ms H was using. So, I didn’t think it was reasonable for Shop Direct to rely on its estimated discretionary income of £686 to assess whether Ms H would be able to repay the money she’d borrowed within a reasonable period of time. And I thought it might have been reasonable and proportionate for Shop Direct to gather some more information from Ms H about her actual credit commitments.”

If your actual financial commitments were significantly higher than what was recorded, this could support your Very claims.

The Importance of Borrower-Focused Lending

Lenders are expected to take a ‘borrower-focused’ approach when making lending decisions. This means considering individual circumstances, not just automated checks.

While Very, like all lenders, has processes in place, the Ombudsman has found instances where these processes could have been more thorough. In some cases, similar issues have arisen even after previous Ombudsman decisions, suggesting there may be room for improvement in how complaints are handled.

Could You Have Valid Very Claims?

Every case is unique, but you might have grounds for Very catalogue claims if:

• Your credit limit was increased when you were already struggling financially
• Payday loan borrowing wasn’t given appropriate weight in lending decisions
• Gambling expenditure that affected your finances wasn’t properly considered
• The affordability assessment didn’t accurately reflect your financial commitments
• You experienced financial difficulty that better checks might have prevented

Many customers have successfully received Very refunds in similar circumstances.

Why Professional Support Can Help

Making a claim against a lender can feel overwhelming. That’s understandable – these are complex matters involving financial regulations and lending standards.

Our experienced team understands the claims process inside out. We know what the Ombudsman looks for, how to present your case effectively, and how to navigate the system to get the best possible outcome.

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