NewDay Ltd · DRN-6255796

The complaint Mr R complains about his NewDay Ltd trading as Aqua credit card. What happened Mr R originally opened an Aqua credit card in January 2018 with a limit of £600. Mr R used his credit card and the limit was increased by Aqua in stages to £5,400 in June 2019. In April 2020 the credit limit was reduced to £3,900. Mr R has explained he was in “Persistent Debt” from June 2022. Mr R also says financial indicators showed he was struggling. Aqua went on to increase the limit to £4,550 in February 2023, £5,300 in July 2023 and £6,300 in July 2025. The outstanding balance was repaid in August 2025. More recently Mr R complained about his Aqua credit card from February 2023. Aqua issued a final response. The final response focused on whether Aqua lent responsibly to Mr R. Aqua said Mr R had waited too long to complain about the application and initial credit limits. Aqua said the credit limit increases in February and July 2023 were reasonably approved. Aqua agreed it shouldn’t have approved the limit increase to £6,300 and refunded interest on balances over £5,300 from July 2025. An investigator at this service looked at Mr R’s complaint. Ultimately, the investigator wasn’t persuaded Aqua lent responsibly when approving the credit limit increase to £4,550 in February 2023. The investigator asked Aqua to refund all interest, fees and charges applied to balances over £3,900 from February 2023. Aqua asked to look at the evidence the investigator relied on to reach their view but didn’t respond further to say whether it accepted. Mr R asked to appeal and said Aqua had missed indicators of financial difficulty going back to February 2023. Mr R said he was in persistent debt from June 2022. Mr R also explained he didn’t think the proposed settlement reflected the nature of the unfairness between him and Aqua that arose from July 2023. Mr R provided commentary on his existing debt levels during the period Aqua increased his credit limit. As Mr R asked to appeal, his complaint has been passed to me to make a decision. 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. I’m aware I’ve summarised the events surrounding this complaint in less detail than the parties involved. No discourtesy is intended by my approach which reflects the informal nature of this service. I want to assure all parties I’ve read and considered everything on file. I’m satisfied I don’t need to comment on every point raised to fairly reach my decision. And if I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve

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focused on what I think are the key issues. My approach is in line with the rules we operate under. Before agreeing to lend by increasing the credit limit, the rules say Aqua had to complete reasonable and proportionate checks to ensure Mr R could afford to repay the debt in a sustainable way. These affordability checks needed to be focused on the borrower’s circumstances. The nature of what’s considered reasonable and proportionate will vary depending on various factors like: - The amount of credit; - The total sum repayable and the size of regular repayments; - The duration of the agreement; - The costs of the credit; and - The consumer’s individual circumstances. That means there’s no set list of checks a lender must complete. But lenders are required to consider the above points when deciding what’s reasonable and proportionate. Lenders may choose to verify a borrower’s income or obtain a more detailed picture of their circumstances by reviewing bank statements for example. More information about how we consider irresponsible lending complaints can be found on our website. I can see Mr R has told us he didn’t originally complain that Aqua lent irresponsibly and that his concerns focused on the its treatment from February 2023. But I think it’s fair to say much of the complaint raised relates to the affordability of the credit card from February 2023 onwards. I note Mr R’s complaint letter to Aqua is titled “Irresponsible lending & breach of CONC 6.7”. So I think it was reasonable for Aqua to look at whether it lent responsibly when responding to Mr R’s complaint. I’ve reached largely the same conclusions as the investigator in terms of whether I think Aqua lent responsibly, for largely the same reasons. I can see it had been several years since Aqua asked Mr R about his income. And I note Mr R’s credit file results show he was already making substantial credit card repayments each month. In the circumstances, I think Aqua should’ve looked to check Mr R’s income before approving the credit limit increase in February 2023. Mr R’s provided evidence that shows he was receiving income quarterly that averaged around £1,250 a month. Using that income, the repayments to an increased credit limit of £4,550 were unlikely to be sustainable for Mr R. I’m satisfied that it’s fair to uphold Mr R’s complaint about his Aqua credit card from February 2023 onwards. I need to think about how to fairly resolve Mr R’s complaint. Our investigator asked Aqua to refund all interest, fees and charges applied to the credit card on balances over £3,900 from February 2023. But Mr R says that while he’s willing to accept that approach until July 2023, from that date Aqua should refund all the interest he was charged against the full outstanding balance. I can see Mr R has told us he was in persistent debt from June 2022. But looking at Mr R’s account history with Aqua I didn’t find that to be the case. The account history shows that from April 2020 until February 2022 there was no outstanding balance on Mr R’s Aqua credit card except for December 2020. Because Mr R cleared that balance quickly, no interest accrued between April 2020 and February 2022. The persistent debt rules explain under CONC 6.7.27 say: This rule applies to a firm with respect to communicating with a customer about, and receiving payments or exercising rights under, a regulated credit agreement for a credit card

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or retail revolving credit, if the firm assesses that the amount the customer has paid to the firm towards the credit card balance or retail revolving credit balance over the immediately preceding 18-month period comprises a lower amount in principal than in interest, fees and charges. Applying that approach to Mr R’s case, the earliest point I can see that the account reached a persistent debt position was in December 2023. That’s reflected by the letter Aqua sent to Mr R in December 2023. I’ve read Aqua’s letter and it explains that by increasing his repayments the balance will be repaid sooner. In addition, Aqua’s letter advised that if Mr R was struggling he could make contact to discuss his account. I’m satisfied the approach taken by Aqua followed the relevant rules. Mr R has provided details of how his overall debt level increased over the time Aqua was increasing his credit limit and explained why he believes it led to unfairness between them. I understand Mr R’s point and arguments. And I agree the decision to approve the credit limit increases wasn’t reasonable. But I haven’t found a level of unfairness that leads me to conclude the interest refund should cover the whole balance from either February or July 2023. I want to assure Mr R that I’ve read and considered everything he’s said when bringing his complaint and in response to the investigator. In my view, the most reasonable approach to settling Mr R’s complaint is for Aqua to refund any interest applied to his credit card on balances over £3,900 from February 2023 onwards. I’ve considered whether the business acted unfairly or unreasonably in any other way including whether the relationship might have been unfair under Section 140A of the Consumer Credit Act 1974. However, I’m satisfied the redress I have directed below results in fair compensation for Mr R in the circumstances of his complaint. I’m satisfied, based on what I’ve seen, that no additional award would be appropriate in this case. My final decision My decision is that I uphold Mr R’s complaint and direct NewDay Ltd trading as Aqua to settle as follows: - Rework the account removing all interest, fees, charges, and insurances (not already refunded) that have been applied to balances above £3,900. - If the rework results in a credit balance, this should be refunded to Mr R along with 8% simple interest per year calculated from the date of each overpayment to the date of settlement. NewDay should also remove all adverse information recorded from February 2023 regarding this account from Mr R’s credit file. - Or, if after the rework there the outstanding balance still exceeds £3,900 NewDay should arrange an affordable repayment plan with Mr R for the remaining amount. Once Mr R has cleared the outstanding balance, any adverse information recorded from February 2023 in relation to the account should be removed from his credit file. *HM Revenue & Customs requires NewDay to deduct tax from any award of interest. It must give Mr R a certificate showing how much tax has been taken off if he asks for one. If it intends to apply the refund to reduce an outstanding balance, it must do so after deducting the tax.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 24 April 2026. Marco Manente Ombudsman

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