Not upheld: Irresponsible lending complaint against The One Stop Money Shop Limited

Decision detail

Summary

Mr M complained that The One Stop Money Shop lent irresponsibly when providing him with a £400 fixed sum loan in May 2024, claiming inadequate checks were carried out and the loan worsened his financial situation. The firm verified his declared income of £2,050 through payslips, obtained his expense information, and conducted a credit check showing no adverse history. The ombudsman found the checks were proportionate to the loan size and term, and that the resulting disposable income of approximately £1,000 made the £86.11 monthly repayments affordable. The complaint was not upheld as the ombudsman found no evidence of irresponsible lending.

The Ombudsman's reasoning

The ombudsman applied the principle that checks must be reasonable and proportionate to the type and amount of credit, term, repayment frequency and total cost. The checks carried out (income verification via payslips, expense declaration, and credit check) were proportionate for a £400 nine-month loan. The credit check did not raise concerns about how Mr M was managing existing commitments, and the declared expenses did not suggest unaffordability. With disposable income of approximately £1,000 against repayments of £86.11, the loan was affordable. The ombudsman rejected the argument that bank statements should have been requested, as the credit check did not raise concerns warranting further investigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website