Frasers Group Financial Services Limited · DRN-5015516

The complaint Mr K complains that Frasers Group Financial Services Limited trading as Studio, is holding him liable for a debt in relation to a credit agreement he says he didn’t take out. What happened In October 2023, Mr K met a third party, who I’ll call ‘A’, on an online dating website. He says that after exchanging telephone numbers, he continued to chat to A through a social media messaging application. Mr K has explained that A had told him about the high level of crime in the area where they lived. He says A asked him to help take delivery of some items they had ordered online. Although Mr K says he declined to help A, several packages arrived at his home address. Over the next few days, Mr K tried to get A to collect the packages, or arrange for the postal service to courier them. However, Mr K says he wanted the packages out of his home, so took them to A’s home address himself. Around a month after Mr K started chatting to A, he says Studio sent him a letter to say an account in his name was in arrears. Mr K says he found out about two other credit agreements, with different lenders around the same time. He also says he then realised that A had applied for three separate credit agreements, using his personal details. So he raised his concerns with each of the lenders and with the police. While two of the lenders agreed that Mr K had been the victim of fraud, Studio didn’t. They said they didn’t have any evidence to show the account was opened fraudulently, so it would continue to operate as normal. Mr K didn’t accept Studio’s response and brought his complaint to our service. One of our investigators looked into Mr K case and found that Studio had treated Mr K unfairly. She looked at the application and at the messages between Mr K and A. The investigator also thought that Mr K was credible and consistent in what he’d explained throughout his complaint. So, the investigator asked Studio to remove Mr K from the credit agreement and refund the repayments Mr K had made with interest added. She also said Studio should remove the account from the details held about Mr K with credit reference agencies. Mr K thanked the investigator, but Studio didn’t agree with the findings. They said Mr K had voluntarily given his personal details to A and allowed the packages to be sent to his home address. They also said Mr K had then willingly given the packages to A. The investigator didn’t change her conclusions, so now Mr K’s complaint has been passed to me to make a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. I want to acknowledge that I’ve summarised the events of the complaint. I don’t intend any discourtesy by this, and it just reflects the informal nature of our service. I’m required to decide matters quickly and with minimum formality. But I want to assure Mr K and Studio that I’ve reviewed everything on file. And if I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve concentrated on what I think are the key issues. Our powers allow me to do this. The application for the credit agreement Studio sought payment from Mr K in relation to a catalogue account. Our service is able to consider complaints relating to these sorts of regulated consumer credit agreements. There are a few possibilities that might have given Studio a proper basis for pursuing Mr K for the debt. Namely: • Mr K opened the account himself. • The third party completed the application for the account on Mr K’s behalf, with his actual or apparent authority. To help me consider the first possibility, I’ve looked at when Mr K contacted Studio, to raise his concerns about the account. I’ve not seen where Studio have sent any correspondence to the email address they have on their records and where Mr K may have responded. Indeed, Mr K says the email address Studio had recorded on their system wasn’t his. Additionally, I’ve not seen where Studio may have sent any letters to Mr K’s home address to confirm the opening of the agreement. Or, where they may have sent a text message to his mobile telephone number, in the days that followed the account opening. I can see that a statement was produced by Studio in late November 2023 and where a payment was missed shortly afterwards. I can also see where Studio contacted Mr K about the arrears in the days that followed. Studio’s records go on to show where Mr K first contacted them in December 2023, to dispute the account was his. This was around two months after the account was opened with Studio. Overall, I think Studio’s contact records add weight to Mr K’s argument, that he only became aware of the credit agreement, when it entered into arrears and was pursued for payment. But, I’ve also thought about Mr K’s social media message records, to see if there was any mention of the credit agreement before December 2023. Having done so, I cannot see where Mr K might have told A that he had opened a credit agreement. I can also see that Mr K stopped contact with A, around the same time he says he first became aware of what had happened. At the end of their communication, the tone of the messages change, when Mr K says he realised what A had done. I think Mr K’s actions here are persuasive, in that it demonstrates when he first found out about the agreement with Studio. Studio have said that Mr K made a payment to the catalogue account, to clear the balance in February 2024. They say this is an indication that Mr K accepted he was responsible for the

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credit agreement. However, Mr K says he made the payment because he was worried about the impact on his credit file and where he wanted Studio to keep his complaint active. In circumstances such as Mr K’s, I think the steps he took were reasonable to try and limit the adverse information reported to credit reference agencies. I don’t think Mr K’s actions could be automatically interpreted as a sign that he had applied for the catalogue account. Furthermore, I can see where Mr K reported his concerns to the police and Action Fraud. While I acknowledge that other than filing a report, neither were able to help bring charges against A, I think it shows how serious Mr K had taken his concerns. Based on all the evidence, on balance, I’m not persuaded Mr K opened the account himself. I think both Mr K’s and Studio’s records show that Mr K was unaware of the credit agreement, until he received notification of the arrears on the account in December 2023. So, I’ve gone on to think about the second possibility, of A applying for the credit agreement on Mr K’s behalf. Mr K says that during his initial conversations with A through the messaging application, they exchanged various pieces of information. He says he hasn’t ever met A in person, so they both shared details about each other via the application, to form a friendship. I’ve listened to a telephone call between Mr K and Studio from March 2024, where Studio have said that similar pieces of information were required to apply for one of their accounts. Having looked at the specific information Studio have said was needed, I think it was reasonable that Mr K may have shared those basic details with A, given the nature of the conversations he was having. I don’t think a discussion involving that information, means Mr K had given authority for A to then use those details to apply for borrowing in Mr K’s name. Within the messages Mr K has provided to us, there is a point where A asked Mr K for a copy of his identification and verification of address documents. A went on to tell Mr K that this was in order to have a delivery sent to his home address. I can see where Mr K refused to give A this information, and was wary of what A could do with those documents. Taking everything into consideration, I think Mr K’s communication with A shows that he didn’t want to provide documents which could lead to possible fraudulent activity. And I think this adds credibility to Mr K’s case, that he didn’t give authority for A to apply for the catalogue account. I’ve also considered where two other lenders have agreed where Mr K has been the victim of fraud. The forms of credit offered by the other businesses are similar to the catalogue account provided by Studio and were opened around the same time. In both of the other instances, the lenders have removed Mr K from the responsibility towards the debt accrued. While I understand that separate lenders will have their own approach to concerns about fraudulent applications, I think the steps each have taken remains relevant in Mr K’s complaint. Given everything that has happened, I think the evidence about the two other lines of credit from the different lenders, shows where Mr K has been a victim of a third party’s actions. In that a third party has taken out credit with multiple lenders without Mr K’s authority. Overall, I find Mr K’s version of events consistent and plausible. And I think he has offered credible testimony. On balance, in the very specific circumstances of this complaint, I don’t

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think Mr K gave A actual or apparent authority to open the catalogue account in his name. But, Studio have said that Mr K’s acceptance of the delivery of the package and his subsequent efforts to drop it off with A, means he accepted responsibility for the account. So, I’ve gone on to think about what happened after the order for the goods was made. The delivery of the package from Studio The messages between Mr K and A show where Mr K was told that A wanted to buy a gift for their daughter. But, A had concerns about having a delivery made to the area where they lived. They said a package may get stolen, if left outside their house. I cannot see where Mr K offered a solution to A, but it is accepted by all parties that the package from Studio was delivered to Mr K’s home address. Having looked at all the evidence, I’m not persuaded that there was an agreement whereby Mr K would take responsibility for the package or goods ordered by A. If anything, I think Mr K thought he was helping A, when he saw that the package had arrived at his home. So, I don’t think the delivery of the package, means Mr K had given his authority for the borrowing with Studio, or that he wanted to pay for the goods ordered. I’ve also considered the steps taken by Mr K, to give the package to A. The subsequent messages between Mr K and A show where Mr K becomes frustrated at A’s unwillingness to collect the package themselves, or arrange for a courier. I think the messages demonstrate where Mr K simply didn’t want the bother of sorting out the arrangements for A’s package. So, to try and end the situation, Mr K says he suggested taking the package to A’s home address. Mr K has provided photographs sent to him by A of their house, along with the messages from the day Mr K took the package there. After carefully considering Mr K’s evidence, I don’t think it supports Studio’s findings. I say this because I’m not persuaded Mr K’s actions show where he accepted responsibility for the payment of the package and then willingly gifted the goods to A. Against this background, I think the delivery of the package from Studio and the steps taken by Mr K afterwards, adds weight to Mr K’s view that he didn’t give A authority to apply for the credit agreement. Distress and inconvenience Mr K says Studio should consider a payment because of the worry and upset they caused. From looking at Mr K’s version of events, it seems that A is largely responsible for the distress and inconvenience Mr K says he has suffered. I’m also aware that my conclusions will mean Studio will suffer a financial loss, if they are unable to recover the goods ordered through the account. Although I accept Mr K was disappointed at the outcome of Studio’s investigation into the account opening and the delivery of the goods, I don’t think they accused Mr K of conspiring with A. I say this having listened to a call between Studio and Mr K, from March 2024. So, I don’t think Studio needs to make a payment to Mr K for the distress and inconvenience he says he experienced.

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Summary I acknowledge Studio’s argument that the package was addressed to Mr K and he then went on to take it to A. It’s not in dispute he received the delivery. But, I’m persuaded Mr K was led to believe the goods in the package had been paid for by someone else. So, I think Mr K was coerced to send them on. Mr K has been forthcoming with information and consistent and credible in what he has told us. While I appreciate why Studio has said he needs to take it up as a civil matter, I still need to consider if Studio were fairly allowed to seek payment from Mr K under the credit agreement. I’ve found, on balance, that Mr K didn’t give his authority for Studio to start the credit agreement. Nor do I think Mr K gave the A any sort of consent to open up a credit agreement on his behalf. So, it follows that I don’t think Studio had the grounds to seek payment from Mr K under a credit agreement he didn’t agree to. Therefore, I agree with our investigator’s conclusions that Studio have treated Mr K unfairly by holding him responsible for the credit agreement. In all the circumstances I think Studio should end the agreement and remove any details about it from Mr K’s credit file. I also think Studio should refund any payments Mr K has made under the credit agreement. Mr K has been without the use of the funds he has paid to Studio. So, I think Studio should also add interest at 8% a year simple, to the refund, from the date Mr K made the payment, to the date of settlement of this complaint. Putting things right For these reasons, Frasers Group Financial Services Limited trading as Studio should: 1. Allow Mr K to exit the credit agreement and cancel it, at no additional cost to him; 2. Remove any information about the credit agreement, from the details held with credit reference agencies; 3. Refund all the repayments to Mr K, that he has made under the credit agreement, from the start of the agreement to the date of settlement of this complaint; and 4. Add interest at a rate of 8% a year simple to part three of this settlement, from the dates the repayments were paid, to the date of settlement of this complaint. Studio must pay these amounts within 28 days of the date on which we tell them Mr K accepts my final decision. If they pay later than this, they must also pay interest on the settlement amount from the date of final decision to the date of payment at 8% a year simple. If Studio deducts tax from any interest they pay to Mr K, they should provide Mr K with a tax deduction certificate if he asks for one, so he can reclaim the tax from the tax authorities if appropriate. My final decision My final decision is that I uphold this complaint and require Frasers Group Financial Services Limited trading as Studio to put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or

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reject my decision before 6 June 2025. Sam Wedderburn Ombudsman

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