The Very Group provide a variety of accounts under different brand names – Very, Littlewoods, and Kays being some examples. These are typically home shopping credit accounts which allow the customer to purchase goods and services, to spread the cost.
As with any other lender, Very needs to carry out proportionate affordability checks to ensure that it is responsible to open an account for a customer, or to increase the customer’s credit limit.
We have seen examples where customers with Very accounts struggle to manage their money effectively. In addition to having an account with Very, there may be customers who struggle with debts and take out too many expensive Payday loans. Taking out lots of Payday loans could mean that it was wrong to increase the customer’s credit limit on their Very account, because it means the customer could borrow too much money and enter a spiral of debt. An Ombudsman explained in this in a legally-binding decision against Shop Direct Finance Company Limited (“SDFC”):
‘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. (https://www.financial-ombudsman.org.uk/decision/DRN1665018.pdf)
Very should be taking a ‘borrower-focused’ approach to any lending decisions it makes. And when investigating any complaints against it regarding Unaffordable Lending, Very should be learning from previous legally-binding Ombudsman Decisions. Unfortunately, evidence suggests that Very does not always learn from what the Ombudsman has said about responsible lending. Here is an example where the Ombudsman needed to explain to Very the relevance of the customer’s gambling habit:
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.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. (https://www.financial-ombudsman.org.uk/decision/DRN-2763092.pdf)
We have also seen examples where Very makes misjudgments with its affordability assessments, which do not result in fair lending decisions:
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. (https://www.financial-ombudsman.org.uk/decision/DRN-3707698.pdf)
We realise that claiming against a high cost loan lender can seem daunting. We aim to make the claiming process as simple as possible. We specialise in affordability claims. Our experienced team will communicate with the lender (and where required, the Ombudsman service) on your behalf. We use bespoke technology to ensure efficient claims handling. Throughout the process, we inform you of claim progress using a “stage process”, so you can track your progress easily. Please remember though, that you do not need to use a claims management company to make your complaint to your lender, and if your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free.
Pre complaint investigation and analysis
Formal mis-selling complaint made
Lender responds with a Final Response Letter
If appropriate resolution cannot be reached with the lender, referral to Financial Ombudsman Service.
Our success fee is due only if your lender makes a compensation payout, and is calculated on the amount of the compensation payout. We do not charge you for any part of a settlement that results in the lender reducing your outstanding balance – that is on the house!
The success fee amount is calculated using a band charging system. There are five charging bands. Each band has a maximum amount that we will charge.
Success Fee Charging Table
|Band||Compensation Payout||Percentage rate the Success Fee is calculated on (including VAT)||Maximum Success Fee in band (including VAT)|
|1||£1 to £1,499||36%||£504|
|2||£1,500 to £9,999||33.60%||£3,000|
|3||£10,000 to £24,999||30%||£6,000|
|4||£25,000 to £49,999||24%||£,9000|
|5||£50,000 or more||18%||£12,000|
Below are examples of how this would work in practice.
|Lower example||Higher example|
|Band||Compensation Payout||Success Fee||Compensation Payout||Success Fee|
If you want to see how much we would charge for a specific amount, please visit our online fee calculator at https://allegiant.co.uk/unaffordable-lending-claim-fees.
Please note that the examples in the tables are for illustration purposes only. They are not an estimate of the likely outcome or success fee.
You can cancel for free at any time within 14-days without giving any reason and without incurring any liability. You can communicate your cancellation by telephone, post, email or online.
You can cancel this agreement at any time after the 14-day cancellation period. However, if a complaint submitted by us is successful, the Success Fee will apply in the usual way.
You can cancel by post: Allegiant Finance Services Limited, Freepost RTYU–XUTZ–YKJC, 400 Chadwick House, Warrington Road, Birchwood Park, Warrington, WA3 6AE; (b) by email: email@example.com; (c) by telephone: 0345 544 1563; or (d) online at https://allegiant.co.uk/compliance/cancellation.
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