Not upheld: Irresponsible lending complaint against Ferratum UK Ltd

Decision detail

Summary

Miss W complained that Ferratum UK Ltd lent to her irresponsibly on 10 February 2018 when she borrowed £400, arguing she was reliant on multiple forms of credit and the lender should have identified this. Ferratum's checks showed Miss W had monthly income of £1,250 against outgoings of £500, making the loan appear affordable. Although Miss W later provided bank statements demonstrating she was using loans to repay other lending, the ombudsman found that at the early stage of the lending relationship and given the loan amount relative to her stated income, Ferratum's proportionate checks were reasonable and the lending decision was justified. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that proportionate checks should be carried out based on factors including loan amount, repayment amounts, income, and expenditure. Given the loan amount relative to Miss W's stated income, the early stage of the lending relationship, and the absence of information that should have prompted deeper investigation, the ombudsman concluded that Ferratum's checks were proportionate and the lending decision was reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website