Very's Misleading Credit Approval Practice

obeythewind

Good day all,

After numerous marketing email i received from Very, I decided to see what the fuss was all about so I decided to apply for a credit account with them.

The account was applied for on the 30th of Oct which was successful and was accompanied with a welcome email, all my account details included.

On the 23rd of November I decided to place an order, I did not receive any order confirmation email from very. So today I decided to check the status of my order only to realise they cancelled my order and wiped off my credit on my account.

I gave a call to their customer service number and the agent I spoke to cold transferred my call to the Security department. I asked why my order had been cancelled without me receiving any notification, which she claims the credit approved was provisional. So i asked her where on their website it mentions credit approved are provisional and she couldn't refer me to anywhere on the website that mentions it.

I asked why I wasn't notified about my order being cancelled which she claimed an email was sent to me, I told her I didn't receive any email which she tried to tell me its my word against hers.

She also made it clear that when an application is made on Verys website, A credit check is not processed at that very point in time, all they do is an electoral check and if that comes positive they approve the credit application. A thorough credit check is only processed after the first order is placed.



Not feeling satisfied with the explanation of poor service received, I called back and spoke to another agent called Lorraine, Who told me Very only sends emails to customers if and when an order has been accepted, so in other words they are allowed to cancel an order without notifying the customer, this implicates what I was told by the earlier advisor.

My main concerns / Questions are :

Isn't this practice of approving credit account application without contacting credit agencies for credit checks illegal, or misleading ?


Is this normal practice by a company regulated by FCA ?

Are they allowed to send an email confirming a credit account application has been approved and not making it clear its only a provisional approval?


Your Opinions will be Highly appreciated.

Regards

OTW

Exile_geordie

obeythewind wrote: »

My main concerns / Questions are :

Isn't this practice of approving credit account application without contacting credit agencies for credit checks illegal, or misleading ?
I don thtink so. What they are saying sounds good as they are not offering you credit when you open your account but only when you place the order - which is when they do a full credit check.


Is this normal practice by a company regulated by FCA ?
If this practice was wrong then Im pretty sure that the FCA wouldnt issue them with a licence to trade

Are they allowed to send an email confirming a credit account application has been approved and not making it clear its only a provisional approval?
I am unsure about that as I dont know what the letter says but Im guessing as you registered on the web they dont have the faciulity to do a 'Hard search' on yoru credit file until you order - as I pointed above


Your Opinions will be Highly appreciated.

Regards

OTW

Answers in red above.

Their T&Cs are HERE with regards to them offering a credit facility.

AJXX

According to the very terms...

If you apply for credit SDFC will search your record at a credit reference agency or agencies who will supply SDFC with credit information as well as information from the electoral register. SDFC will use credit scoring methods to assess your application and to verify your identity. Credit searches and other information which is provided to SDFC and/or the credit reference agencies about you and those with whom you are financially linked may be used by SDFC and other companies if credit decisions are made about you or other members of your household. You are linked with another individual if you make a joint credit application or run a joint credit account with them. Even if your application goes no further, the credit reference agencies will add details of this search and your application to your record. SDFC does not offer a quotation service and by proceeding with an application, a search will be registered at a credit reference agency.

I would say the second person was more inline with the above, and the first person was speaking out their bottom.

I always assumed a business has the right to cancel any order as they see fit (regardless of credit account or not).

obeythewind

Thank you very much for your input.

The confirmation email I received from very after submitting the application is below, No where does it mention that the credit account was only provisional as advised by their agent.

I understand any business can cancel an order as they see fit but am sure there must be something wrong with telling consumers they have been approved for a credit account without making them aware its only a provisional approval and also not processing a thorough credit check with relevant agencies before making a decision.



Your new Customer Account Number is: ********- Please give us this number every time you call

Credit limit: £***.00

Welcome To Your New Very Account

Dear *********,

We're super excited to tell you that your application for a Very Account from Very has been successful!

As a new Very Account customer, remember you get fantastic ways to spread the cost every time you shop! So all those hot new season trends, gorgeous going out dresses and amazing new styles for your home are even more affordable - and you don't even have to pay a penny upfront (nice!)

So here are your options...

Want to spread the cost over 3 months without paying interest? - go right ahead with Take 3! Just add things to your Very Account and we'll automatically calculate a Take 3 amount for you on your statement each month (we're really helpful like that!).
Or if your budget's a little stretched you can go for the minimum payment option which could be as little as £5 or 7% - whichever is the greater*. But if you want to pay more you can, right up to clearing your balance in full- the choice is yours!
You could also choose to buy what you want today and pay nothing for 12 months with Buy Now Pay Later.
Go shopping today and take advantage of these great affordable payment options exclusive to the Very Account.

Track Your Account Online

Just log into the 'My Account' area of our website using just your account number or your email address together with your password to keep track of your account.
Within ‘My Account' you can make a payment, check your balance, check your order status and transaction history and even have your statement explained.
Look after your account and new purchases

Now that you've opened an account with us you may want to think about protecting your account payments. We also offer a wide range of products to protect your purchases from our Service Guarantee warranty for your new must have electrical items to Mobile Phone Insurance and Furniture Insurance. Visit Very Money Zone to find out more.

Free Delivery with Collect + and Returns too (yipee!)

We know you need your fashion fixes right away. So as well as free delivery when you deliver to a Collect + store, you can choose to have your shopping delivered when you're in. And, if what you've ordered isn't quite right, then we'll replace or refund most items, as long as they're returned unused and in their original packaging within 28 Days.

So have fun shopping with Very (we know you will!) See you next time!

Kind regards,
Mary Creed - Online Customer Service Manager
Very
The new online department store

Your APR is 39.9 %. Or if you clear your balance by the due date on your statement you can enjoy 21 days to pay without being charged any interest.

* You can spread the cost using the Very Account where the minimum monthly payment is £5 or 7% of your current balance, whichever is greater. 1 month = 28 days

Credit provided, subject to status, by Shop Direct Finance Company Limited. Aintree Innovation Centre, Park Lane, Netherton, Bootle, L30 1SL. Authorised and regulated by the Financial Conduct Authority. Goods/services provided by Shop Direct Home Shopping Limited. Registered office: First Floor, Skyways House, Speke Road, Liverpool, L70 1AB.

Contacting us is easy:
By e-mail simply log on and click into 'Contact Us'.
By telephone call 0844 822 2321. Our lines are open 7am to 11pm seven days a week.
Calls made from BT landlines will cost no more than 5p per minute. Charges will vary for calls made via other service providers.

scratchyrat

The very.co.uk account and the line of credit are two separate things. You can have one without the other. Being accepted for a very.co.uk account does not mean you will be accepted for credit.

There's nothing in that email that says your credit has been approved. Just your very.co.uk account, which is basically not much.

SuperHan

Their e-mail says that credit is provided subject to status.

It seems that subject to your status, it isn't provided.

frugal_mike

It does seem a little confusing to give a specific credit limit and APR if no credit has been authorised, especially since the subject-to-status qualification doesn't appear to be linked to the credit limit (assuming those asterisk have been added by OP of course).

JReacher1

Most similar companies do this.

Until you are credit scored then it's impossible for them to know whether you are going to pass. It's actually quite good the fact they don't credit score until the first order is placed as many companies would credit score on sign up.

The email is confusing but the majority of customers wouldn't be affected as they would pass credit scoring. The customers they annoy are people like yourself who they don't actually want to order with them.


Its not ideal but I wouldn't worry too much about it.