Not upheld: Irresponsible lending complaint against Ferratum UK Ltd

Decision detail

Summary

Mr D complained that Ferratum UK Ltd lent to him irresponsibly by failing to verify his income and expenditure before approving two short-term loans in May 2019 (£500 and £60). Mr D subsequently entered a debt management plan and experienced financial difficulties. The ombudsman found that Ferratum's checks were proportionate for the early stage of the lending relationship and that based on the information available—including Mr D's declared income and expenditure and credit reference agency data showing no significant adverse history—the loans appeared affordable. The ombudsman acknowledged that Mr D's actual financial situation may not have been fully reflected in the available information but found no evidence that Ferratum acted unfairly or unreasonably. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to short-term lending complaints, considering that proportionate checks can be less thorough at early stages of a lending relationship. For loan 1, as the first loan with no track record, the information gathered suggested affordability based on declared disposable income and there was nothing requiring further investigation. For loan 2, taken within three weeks and for a substantially smaller amount, the circumstances were unchanged and the loan appeared comfortably affordable. The ombudsman found that at this early stage and given the loan amounts, proportionate checks did not require Ferratum to verify Mr D's declarations or check additional information sources. The ombudsman acknowledged that Mr D's actual financial situation may not have been fully reflected in the information provided or obtained, but found no evidence that Ferratum acted unfairly or unreasonably based on what was available at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website