Next Retail Limited · DRN-6148907

The complaint Miss P complains that Next Retail Limited provided her with an unaffordable catalogue shopping account. What happened Next provided Miss P with a catalogue shopping account in 2017. I’ve set out the terms of lending provided in the table below: Date Credit limit increase/decrease Credit limit May 2017 Original limit £150 September 2017 1st limit increase £1,500 November 2017 2nd limit increase £3,750 September 2019 3rd limit increase £5,000 January 2021 Limit decrease £3,750 October 2021 4th limit increase £5,000 March 2022 Limit decrease £3,750 September 2022 Limit decrease £3,000 January 2023 5th limit increase £3,750 May 2023 6th limit increase £5,000 March 2024 Limit decrease £3,000 July 2024 7th limit increase £3,750 November 2024 8th limit increase £5,000 Miss P complained to Next in June 2025 about unaffordable lending. She said Next ought to have identified through proportionate checks that she was already struggling with debt and had been using other credit to repay this borrowing. As such Miss P says Next made unfair lending decisions. Next issued a final response in September 2025 in which it didn’t uphold Miss P’s complaint. It said it wouldn’t review the lending events that had taken place more than six years before Miss P had complained, as it considered these to be outside of the regulatory timescales. It did go on to consider the lending events within six years of Miss P’s complaint; however, it said its checks were proportionate and that it had made fair lending decisions. Unhappy with Next’s response Miss P referred her complaint to our service for review. One of our investigators looked at the details of this complaint and considered it was reasonable to interpret it to be about the fairness of Miss P’s relationship with Next. As such she went on to review the details of the complaint on this basis. Having done so, she didn’t find Next had created an unfairness in the relationship, and therefore didn’t uphold the complaint. Next didn’t respond to our investigator’s view; Miss P responded and didn’t agree. In summary, she maintained her position that better checks ought to have led to Next identifying that these limits weren’t affordable for her. Miss P asked for an ombudsman’s review, so the complaint has been passed to me to decide.

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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. The information in this case is well known to Miss P and Next, so I don’t intend to repeat it in detail here. I’d like to assure both parties I’ve carefully reviewed everything available to me even though I may not have commented on it. Instead, I’ve focused my decision on what I consider to be the key points of this complaint. I don’t mean to be discourteous to Miss P or Next by taking this approach, but this simply reflects the informal nature of our service. Initially I think it’s helpful for me to set out that there are time limits for bringing a complaint to our service, and Next has said Miss P’s complaint about some of its lending decisions has been referred to us late. Our investigator set out within their view why they didn’t think we could look at a complaint about the lending event that Next made more than six years before the complaint was made. But they also went on to explain why it was reasonable to interpret Miss P’s complaint as being about an unfair relationship as described in section 140A (s.140) of the Consumer Credit Act 1974 (CCA); and why they therefore considered Miss P’s complaint about an allegedly unfair lending relationship had been made to us in time. I don’t intend to go into the same level of detail in my decision here that our investigator already set out, but for the avoidance of doubt I agree with our investigator that I have the power to look at Miss P’s complaint on this basis. I say this because I’m satisfied Miss P’s complaint is that Next provided her with lending which she says was unaffordable, and that this potentially created an unfairness in the relationship. This lending may have made the relationship unfair, as Miss P may have paid more in interest and charges than she could afford. I acknowledge Next doesn’t agree we can look at any events more than six years before Miss P’s complaint was made, but as I’m not upholding this complaint, I won’t be commenting on this further. In deciding what’s fair and reasonable I’m required to take into account, amongst other matters, relevant law. As I consider Miss P’s complaint is about the fairness of her relationship with Next, relevant law in this case includes s.140A-C of the CCA. S.140A says a court may make an order under s.140B if it determines that the relationship between the creditor (in this case Next) and the debtor (Miss P), arising out of a credit agreement is unfair to the debtor because of one or more of the following, having regard to all matters it thinks relevant: • Any of the terms of the agreement. • The way in which the creditor has exercised or enforced any of his rights under the agreement. • Any other thing done or not done by or on behalf of the creditor. Case law shows that a court assesses whether a relationship is unfair at the date of the hearing, or if the credit relationship ended before then, at the date it ended. That assessment has to be performed having regard to the whole history of the relationship. Next has confirmed this lending relationship is ongoing; so, I’m satisfied I can consider this complaint about an unfair relationship.

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S.140B sets out the types of orders a court can make where a credit relationship is found to be unfair – these are wide powers, including reducing the amount owed or requiring a refund, or to do or not do any particular thing. Given the details of Miss P’s complaint, I need to consider whether Next’s decisions to lend to her, or any other actions it may have taken, created an unfairness in the relationship between her and Next; and if it did, whether Next took reasonable steps to remove that unfairness. We’ve set out our approach to complaints about irresponsible and unaffordable lending as well as the key rules, regulations and what we consider to be good industry practice on our website. I’ve followed this approach when considering Miss P’s complaint. Having done so, I don’t consider Next made unfair lending decisions when providing Miss P with these credit limits. I say this because: • Next hasn’t been able to provide data about the checks it completed in 2017 before providing the original limit – and Miss P hasn’t been able to provide documentary evidence about her financial circumstances around this time either – which in both instances I don’t consider unreasonable, given the amount of time that has since passed, and the data retention obligations on businesses. So, I can’t reasonably conclude that the original limit of £150 was unfairly provided. • Next went on to increase Miss P’s limit on two occasions in 2017, latterly to £3,750. I think Next’s checks needed to be more detailed here. While it did undertake a credit check which I’ve seen and showed no information that I consider would have been concerning to Next at the time, I consider proportionate checks ought to have led to it obtaining an understanding of Miss P’s income and expenditure, to satisfy itself that she could sustainably afford the new limits being provided. • As I’ve set out above, Miss P hasn’t been able to provide our service with any documentary evidence dating back to 2017. However, she has provided testimony about her recollection of her income and expenditure in 2017. Based on the information contained within this testimony it appears Miss P has a reasonable level of monthly disposable income, which could therefore have been used to repay the credit limit increases that were provided in 2017. • Next went on to apply further credit limit increases, and credit limit decreases, to Miss P’s account between 2019 and 2024. However, I’ve reviewed the account statements which show Miss P’s total balance never exceeded £3,000. • This means that although Next decreased Miss P’s limit and applied further limit increases across the years, her balance never exceeded the £3,750 limit which I’ve found to have been fairly provided in late 2017. As such, while further changes to the credit limit took place, Miss P hasn’t utilised the available credit above the limit I’ve found to have been fairly provided; so, it therefore follows she hasn’t suffered a financial loss by way of interest or charges relating to these further limit increases. • I’ve therefore not gone on to consider whether the further credit limit increases after 2017 were fairly provided; because even if I were to find that they hadn’t been fairly provided, Miss P hasn’t incurred a financial loss because of these further limit increases. So, taking all of the above into account I’ve not seen anything which leads me to conclude that Next made unfair lending decisions when providing Miss P with the credit limits up to £3,750 in late 2017; and as her balance never went above £3,000, it follows that she hasn’t suffered a financial loss because of the further limit increases. I’ve gone on to consider if Next has acted unfairly or unreasonably in any other way during this relationship.

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Miss P has said she has raised some concerns with Next across the life of this agreement; however, Next’s phone call retention policy means it isn’t able to provide us with copies of these calls. On review of the contact notes and chats Next has been able to provide, I’ve seen discussions about late payments across the life of the agreement, and conversations about orders. However, there’s no notes to suggest Miss P made Next aware at any point about any financial difficulties, or concerns with the account limits for that matter, until she made her complaint. So, I haven’t seen anything which leads me to conclude Next has acted unfairly or unreasonably in any other way. Next set out within its final response that Miss P should contact it to discuss a suitable credit limit, if she wanted to continue to use the credit facility. If Miss P hasn’t already engaged with Next, I would suggest she do so, to enable it to assess and put in place an affordable credit limit for her, should she wish to continue to use the facility. I acknowledge my decision will likely be disappointing to Miss P; I don’t doubt the testimony she’s provided about her personal and financial situation across the years. But for the reasons set out above it follows that I’m not directing Next to take any further action in resolution of this complaint. My final decision My final decision is that I don’t uphold Miss P’s complaint about Next Retail Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss P to accept or reject my decision before 24 April 2026. Richard Turner Ombudsman

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