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Irresponsible Lending Complaint

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I have submitted a compliant today to:
capital one, Barclay card and Tesco in respect of irresponsible lending (increasing credit limits when I had no hope of every repaying the previous limit)

 Barclay card and Tesco have already got back to me with acknowledgment and my complaint reference number.

Just wondered if anyone had a successful response from these lenders for a similar complaint without referring to the ombudsman? 

Thank you 

Comments

  • I have submitted a compliant today to:
    capital one, Barclay card and Tesco in respect of irresponsible lending (increasing credit limits when I had no hope of every repaying the previous limit)

     Barclay card and Tesco have already got back to me with acknowledgment and my complaint reference number.

    Just wondered if anyone had a successful response from these lenders for a similar complaint without referring to the ombudsman? 

    Thank you 
    ** complaint 

    Sorry, should have added, particularly interested to know if anyone has managed to have a defaulted account removed from
    their credit score as a result of their complaint? 
  • DullGreyGuy
    DullGreyGuy Posts: 18,566 Forumite
    10,000 Posts Second Anniversary Name Dropper
    You can search on the Ombudsman website to see cases that have been escalated to them eg:
    https://www.financial-ombudsman.org.uk/decisions-case-studies/ombudsman-decisions/search?Keyword=irresponsible+lending&BusinessName=tesco&Business=tesco&IndustrySectorID%5B1%5D=1&Sort=date

    So for Tesco, as above, of the first 20 cases 3 were upheld and the remaining 17 were rejected. 

    The FOS website will give a more negative view than the reality though given these are all cases where the company rejected the complaint and so you'd need to add back in the cases where the company had accepted they did wrong and put things right hence no FOS complaint. 
  • Nasqueron
    Nasqueron Posts: 10,636 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 18 June at 10:20AM
    Irresponsible lending is difficult really with credit cards unlike say payday loans, you are free to reject the increase, you are equally free to not spend more on it. The ombudsman calls these "revolving credit"

    Did you speak to the bank at the time to say you were in financial difficulty, asking for help?

    Were you honest about income and expenditure? Were you repaying more than the minimum?
    What was your income vs credit limit?

    How long ago was the spending i.e. is it outside the time bar rule of 6 years from taking out the product and 3 years from when you knew, or could reasonably have known, you had cause for complaint?

    When you look at the cases as well

    DRN-5237970 - upheld in part because Tesco gave a second card when the first one wasn't being cleared fully

    DRN-5036337 - upheld in part because of the final 2 limit increases  

    Sam Vimes' Boots Theory of Socioeconomic Unfairness: 

    People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.

  • Hoenir
    Hoenir Posts: 7,721 Forumite
    1,000 Posts First Anniversary Name Dropper


    Just wondered if anyone had a successful response from these lenders for a similar complaint without referring to the ombudsman? 


    There'll be hoops to jump through first. Do you have all your financial information for that period to hand? 
  • ManyWays
    ManyWays Posts: 1,305 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    Most Ombudsman complaints are resolved at the initial investigation phase, which is informal, and the decisions are not published. Looking at published decisions often isnt a great deal of help as any lenders will accept any decision they think they are unlikely to win, so only the "hard" cases go through to the ombudsman.

    The fact that you accepted a limit originally and any increases isnt relevant, the FCA's CONC rulebook says:

    CONC 5.2A.27 R 
    1. In relation to entering into a regulated credit agreement for running-account credit, the firm must assume that the customer draws down the entire credit limit at the earliest opportunity and repays by equal instalments over a reasonable period.
    2. In relation to significantly increasing the credit limit that applies to an existing regulated credit agreement for running-account credit, the firm must assume that the customer draws down the entire available balance up to the increased credit limit at the earliest opportunity and repays by equal instalments over a reasonable period.
    3. ...
    4. The firm must set the credit limit in the light of the assumptions in (1) to (3).
     There is nothing in there that says that setting a higher limit is OK if the customer accepts it.
  • DullGreyGuy
    DullGreyGuy Posts: 18,566 Forumite
    10,000 Posts Second Anniversary Name Dropper
    ManyWays said:
    Most Ombudsman complaints are resolved at the initial investigation phase, which is informal, and the decisions are not published. Looking at published decisions often isnt a great deal of help as any lenders will accept any decision they think they are unlikely to win, so only the "hard" cases go through to the ombudsman.
    Investigation stage isnt informal, it's still counted for statistical purposes of the number of complaints registered, closed, upheld etc. Similarly the bill to the FS company is the same irrespective of its Investigator or Ombudsman. 

    Agree that the FS companies will accept cases they lose at investigation phase but your comment ignores all the "non-hard" cases where it's simply the consumer being unwilling to accept the decision. Given the overall uphold rate for personal loans is 35% it would strongly suggest that the majority of cases that go on to the ombudsman stage are more driven by consumers taking a punt given they have nothing to lose than FS companies challenging the "hard" cases 
  • ManyWays
    ManyWays Posts: 1,305 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    it would strongly suggest that the majority of cases that go on to the ombudsman stage are more driven by consumers taking a punt given they have nothing to lose than FS companies challenging the "hard" cases 
    Probably; but that has nothing to do with the point I was trying to make, which is that a low uphold rate in recent  published cases says nothing about how many are upheld at the investigator level. 
  • Nasqueron
    Nasqueron Posts: 10,636 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    ManyWays said:
    it would strongly suggest that the majority of cases that go on to the ombudsman stage are more driven by consumers taking a punt given they have nothing to lose than FS companies challenging the "hard" cases 
    Probably; but that has nothing to do with the point I was trying to make, which is that a low uphold rate in recent  published cases says nothing about how many are upheld at the investigator level. 
    Equally it says nothing that these cases are won or lost, they roll up in general stats. In the absence of evidence to the contrary though it's a fair statement that the published cases likely reflect the unpublished ones - it would be weird for it not to e.g. why would the FOS not publish many cases showing most are resolved in the customer favour. It's also logical as the CC limit increase can be rejected and indeed, while it can be expensive, it's cheaper than say a pay day loan and customer is more likely to get it than a loan on top of their existing debt 

    Sam Vimes' Boots Theory of Socioeconomic Unfairness: 

    People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.

  • ManyWays
    ManyWays Posts: 1,305 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
    FOS can only publish cases that are taken to the ombudsman. It's common for some lenders to accept most adjudicator decisions so the published cases can be a very odd section of the overall cases, not representative. 

    Lenders may have set limits that were unmanageably high, and the fact that the customer accepted it is not relevant. 


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