J D Williams & Company Limited · DRN-6126681

The complaint Miss C complains that J D Williams & Company Limited (JDW) gave her a catalogue shopping account and subsequent limit increases she couldn’t afford to repay. What happened In December 2019 JDW gave Miss C a catalogue shopping account with a £500 limit. It then went on to provide the following limit increases: Date Limit increase New limit February 2020 CLI one £600 April 2020 CLI two £900 May 2020 CLI three £1,250 December 2020 CLI four £1,500 April 2021 CLI five £2,000 October 2021 CLI six £3,000 December 2022 CLI seven £3,500 Miss C argues that JDW failed to complete proportionate checks before giving her this account. She says that if JDW had checked her credit file, it would have seen that she was already in difficulties before agreeing the initial limit or subsequent increases. Miss C has said she was regularly only paying the minimum repayments and despite this, it still increased her limit. Miss C has also said that she had wider health problems and got into difficulties on the account. She’s said that at this time JDW failed to provide sufficient support. JDW considered her complaint but disagreed. It said that its checks completed before the initial lending decision and subsequent limit increased were proportionate. And as a result of these checks, it was reasonable to lend. In addition, it has explained that it did offer reasonable forbearance, including signposting to organisations which could offer support and set up a repayment plan of £50 per month, which it reduced to £20 per month at Miss C’s request. Miss C didn’t agree and referred her complaint to our service. One of our investigators considered the complaint but didn’t uphold it. They didn’t think JDW had completed proportionate checks. They also thought that it had failed to evidence the results of some of the checks it did complete. However, based on the information available, the investigator thought that proportionate checks would have most likely shown the lending was affordable

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for Miss C. In response to the investigator’s assessment Miss C didn’t agree and asked for an ombudsman to consider the complaint. So, the complaint has been passed to me to consider. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’m not going to uphold this complaint. I appreciate this will be disappointing for Miss C. I’ve explained why below. We’ve explained how we handle complaints about unaffordable and irresponsible lending on our website. I have used this approach to help me decide Miss C’s complaint. JDW needed to make sure it lent responsibly to Miss C. It therefore needed to complete sufficient checks to determine if Miss C could afford to sustainably repay the lending. Our website sets out our approach to what we typically think when deciding if a lender’s checks were proportionate. There is no set list of checks a lender should do, but there is guidance on the types of checks a lender could complete. However, these checks needed to be proportionate when considering things like the amount and term of the lending, what the lender already knew about the consumer, etc. Did JDW complete proportionate checks? Prior to agreeing the initial £500 limit, JDW said it completed a credit search. The results of this showed Miss C had no CCJs, defaults or bankruptcy. It showed in the past six months the worst account status was two months, suggesting Miss C had at least one account with two missed payments. She also had nine active accounts showing. JDW has said it didn’t complete an income and expenditure assessment prior to lending. Instead, it relied on statistical data provided by credit reference agencies and other external sources of data. It used this information, together with Miss C’s credit file results, to predict the likelihood that the lending decision would be affordable. However, when our investigator asked for specific information about what was considered, JDW hasn’t provided this information. I am therefore not persuaded JDW has evidenced that it completed proportionate checks before agreeing the initial limit to Miss C. Whilst I appreciate this limit was a relatively low amount of £500, JDW hasn’t evidenced what information/ statistical data it relied on beyond the credit file results. In addition, from the information provided, I can’t see JDW has requested any information regarding income or made attempts to verify this. Turning to the subsequent limit increases, I can see JDW completed credit searches and monitored the ongoing use of the account. However, as explained above, JDW hasn’t provided specific information about the data relied on outside the consumer’s credit search results. In addition, there still appears to be no consideration of Miss C’s income. This is particularly concerning given around six months after the initial lending decision, the agreed limit had exceeded £1,000 and continued increasing until it reached £3,500. So, I don’t think JDW completed proportionate checks before agreeing any of the limit increases. I also think there came a point when JDW should have considered Miss C’s essential expenditure. In the circumstances of this case, JDW agreed a number of limit increases and

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many of them were only a short period after the previous limit increase. And given the size of the limits provided, I think from at least CLI five onwards JDW should have also given some consideration to Miss C’s essential expenditure before agreeing these increases. What would proportionate checks have most likely shown? Although I’m not persuaded JDW has evidenced that its checks went far enough, I have considered the information JDW relied on. Turning firstly to how Miss C was managing her account, I can see that prior to each limit increase Miss C has made regular repayments towards her outstanding balance in the vast majority of months. And there are a large number of examples where Miss C has paid more than the minimum repayment. So, I don’t think Miss C’s account activity suggested that she was struggling prior to the final increase or that any of the increases shouldn’t have been given. From Miss C’s credit file results, I can see that at the time of the initial lending decision she had a worst payment status of two. So, she’d missed two months of payments on at least one account. I don’t think this is significant given Miss C had no recorded defaults, CCJs or bankruptcy and the initial limit was only £500. It also looks like she brought this account up to date shortly after this. I can then see she fell behind by two months on at least one account from April to July 2020. However, again she has brought the account/accounts quickly up to date. And I can’t see any further late payments are recorded whilst JDW was increasing her credit limit. So, I don’t think this limited adverse information was sufficient to suggest significant problems managing her finances or that JDW shouldn’t have agreed increases during this period. Turning to Miss C’s income, I can see from her bank statements that she was in receipt of state benefits. For the avoidance of doubt, I don’t think it would have been proportionate for JDW to have reviewed her bank statements before agreeing the credit limits in question. However, I think it’s reasonable to rely on this information as an indication of what proportionate checks would have most likely revealed at the time. When the initial limit and early increases were given, I can see she was earning on average between £1,500-£1,600 net per month. By CLI four this had increased to over £2,000 per month. So, it’s clear Miss C was in receipt of income throughout this period. I also note that early on in the lending relationship Miss C had some savings available. Turning to Miss C’s regular expenditure, I explained above why I thought that from CLI five onwards JDW should also have started to gather information about this before increasing her limit further. So, I’ve reviewed Miss C’s bank statements to gain an understanding of the likely information JDW would have uncovered if it had taken these steps. Having done so, I’ve noted that Miss C was repaying a large number of existing credit commitments. However, her credit search results suggested these accounts were being well managed and her activity on the account in question didn’t suggest she was struggling. I’ve considered her payments towards existing credit and together with other identifiable essential expenditure, the limit increases look to be affordable for her. She was also left with a reasonable amount of disposable income for other essential costs. I have noted that there doesn’t appear to be housing costs on Miss C’s statements. We queried this with Miss C who didn’t provide clarification. The investigator therefore concluded that Miss C didn’t have these costs and suggested they were likely met from other state benefits, which she hasn’t disputed. So, taking everything into consideration, whilst I don’t think JDW completed proportionate checks before agreeing to lend, I think that had it done so it would have been reasonable to lend. I say this because if JDW had explored her income it would have seen she was

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receiving an income throughout and that her income increased from around CLI four onwards. And if it had also explored her essential expenditure from CLI five onwards, it would have seen she most likely had sufficient means to repay the credit limit increases provided. So, because of this, I don’t think JDW acted unfairly in agreeing the initial limit or subsequent limit increases. I’m therefore not upholding her complaint in relation to the lending decisions made. What support was given when Miss C experienced financial difficulties? I can see that Miss C went on to later experience difficulties on the account. This was from around April 2024 onwards. Miss C argues that JDW didn’t do enough to support her when she struggled to repay the account. I can see that when Miss C contacted it, JDW stopped charging interest and set up a repayment plan for £50 per month which began in May 2024. It has also said it signposted Miss C to various organisations which could offer support. Miss C then subsequently requested a reduction in this plan to £20 per month which JDW agreed. Taking everything into consideration, I think JDW took the types of steps I would have expected it to. So, I think that it offered reasonable forbearance to Miss C when she was struggling. Did JDW act unfairly or unreasonably in some other way? I’ve also considered whether the relationship might have been unfair under s.140A of the Consumer Credit Act 1974. However, for the reasons I’ve already given, I don’t think JDW lent irresponsibly to Miss C or otherwise treated her unfairly. I haven’t seen anything to suggest that Section 140A or anything else would, given the facts of this complaint, lead to a different outcome here. My final decision My final decision is that I don’t uphold this complaint against J D Williams & Company Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss C to accept or reject my decision before 15 April 2026. Claire Lisle Ombudsman

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