Affordability Complaints - Advice Please

DebtFreeBy2027

Hi, I am looking for some advice please.

I have had credit cards for around the last 10 years and I also had a HSBC overdraft before that, that I didn’t ask for.

I have never missed a payment but I have constantly opened new credit cards and moved balances to 0% cards in order to keep afloat.

I had around £25,000 worth of debt that my mum paid off for me and I am now paying her back. Since then my debt to my mum is now £13,000 and I have another £10,000 on another credit card.
I had my first child in January so I am now getting serious about paying it all off and want the majority gone by the end of the year.

I have probably only paid interest on one of the cards as the others have all been 0% balances although I have paid a lot of fees moving them around.

My question is, is there any point me making affordability complaints from companies putting up my credit limit, even though I’ve always paid on time?

ManyWays

Having a child does make you rethink you life!

There is little point in complaining about any card unless you have paid interest on it.

How long ago was the HSBC overdraft cleared? No loans? Car finance?

CliveOfIndia

I'm not sure you'll have much luck on the basis of them increasing your credit limit. Firstly, you always have the option of declining the increase. Secondly, no-one is forcing you to use the increased limit - it doesn't matter what limit you have, there's a large element of personal discipline required, inasmuch as you have the option to not spend what you can't afford.

Sorry, I hope that doesn't come across as being sanctimonious, that's not my intention at all. Merely pointing out the facts as viewed objectively.

Rob5342

The FOS do place a lot of responsibility on the lender in terms of checking affordability when they increase limits. I have won three complaints about my credit card limits being raised. The typical redress is a refund of the extra interest you paid due to the increased limit and also the removal of any adverse credit report information that was added as a result of the limit increase, but you still have to repay the capital. If neither of those apply to you then you aren't going to benefit from winning a complaint.

ManyWays

https://forums.moneysavingexpert.com/discussion/comment/81936987#Comment_81936987

This is just not in accordance with what the FCA's CONC regulations say. and that is what the Ombudsman uses for decision making:

CONC 5.2A.2701/11/2018R

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. If, after considering the individual circumstances of the particular customer of which the firm is aware at the time the creditworthiness assessment is carried out, it is reasonable to make further assumptions about the timing and amounts of drawdowns of credit and repayments over the duration or likely duration of the credit, then the firm must do so and these assumptions must be reasonable ones.
4. The firm must set the credit limit in the light of the assumptions in (1) to (3).

The fact a customer COULD have declined an increase is irrelevant, it should not have been offered if it would be unaffordable.
The fact that no one FORCED you to use the limit is also irrelevant, If you used a higher limit that was unaffordable, that is unaffordable lending.

Rob5342

If you look at the FOS decisions there are a good number where they have said the lender was wrong to increase the credit limit, for example this one:

https://www.financial-ombudsman.org.uk/decision/DRN-6005363.pdf