Upheld: Irresponsible lending complaint against The One Stop Money Shop Limited
Financial Ombudsman decision DRN-5376386 of 2025-03-07T00:00:00+00:00. Irresponsible lending complaint against The One Stop Money Shop Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5376386 |
|---|---|
| Decision date | 2025-03-07T00:00:00+00:00 |
| Firm | The One Stop Money Shop Limited |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | The One Stop Money Shop Limited should: (1) Calculate the total amount lent (£400) less any interest, fees and charges; (2) Deduct all repayments Ms H made; (3) If Ms H paid more than the original amount lent, refund the overpayment plus 8% simple interest per year from the date of overpayment until settlement; (4) Remove any adverse information from Ms H's credit file relating to the loan; (5) Provide a tax certificate if HMRC requires tax to be deducted from the interest. |
Summary
Ms H complained that The One Stop Money Shop Limited lent her £400 irresponsibly in July 2020 without conducting adequate affordability checks. The lender verified her income at £1,800 per month and conducted a credit search, but Ms H's credit file showed over £13,000 in debt, multiple accounts over agreed limits, recent missed payments, and payday loan usage. Ms H had also understated her expenditure, claiming £200 monthly debt repayments when actual minimum payments would be approximately £365. Bank statements revealed Ms H was almost always overdrawn and regularly exceeded her overdraft limit. The ombudsman found the lender's checks were not proportionate to the individual circumstances and should have verified her expenditure through bank statements, which would have led to loan rejection. The complaint was upheld and the lender was ordered to refund overpayments plus interest and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that while the lender carried out some checks (income verification and credit file search), these checks were not proportionate to the individual circumstances. The credit file showed clear indicators of financial stress and instability: Ms H was over limits on multiple accounts, had recent missed payments, and had used payday loans. Most critically, Ms H had understated her expenditure, claiming £200 per month in debt repayments when actual minimum payments would be around £365 per month. A responsible lender would have had good reason to doubt her declared circumstances and should have verified her expenditure through bank statements. The bank statements would have revealed she was almost always overdrawn and regularly exceeding her overdraft limit, demonstrating she could not afford additional borrowing. Therefore, the lender should have declined the application.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| The One Stop Money Shop Limited, all decisions | 21 | 21% |
| Irresponsible lending, all decisions | 29,406 | 38% |
| Personal loan, all decisions | 22,762 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website