Not upheld: Irresponsible lending complaint against Zopa Limited

Decision detail

Summary

Mr H complained that Zopa unfairly arranged a £3,000 personal loan in November 2019 that he could not afford, forcing him to take out another loan to repay it. Zopa had obtained information on Mr H's income, expenditure, and credit search results showing well-maintained commitments before approving the loan. The ombudsman found that Zopa's proportionate checks were reasonable for a first loan of relatively small value compared to Mr H's income and that the information obtained suggested affordability. The ombudsman rejected the investigator's recommendation to uphold the complaint, finding that Zopa could only rely on information available at the time and was not required to conduct deeper financial analysis such as obtaining bank statements. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that Zopa obtained a reasonable amount of information before approving the loan and that this information suggested the repayments were affordable. For a first loan of a relatively small sum compared to Mr H's income, proportionate checks did not require obtaining bank statements or deeper financial analysis. Zopa could only make decisions based on available information and could reasonably rely on Mr H's assurances that loan proceeds would be used to clear existing credit balances. The ombudsman found no obvious inconsistencies that would have warranted more extensive checks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website