Not upheld: Irresponsible lending complaint against Premium Credit Limited

Decision detail

Summary

Mr R complained that Premium Credit Limited failed to carry out adequate affordability checks and that he was unaware he was entering a credit agreement when he enrolled on a training course costing £660 in November 2022. Mr R claimed he only accessed the course material for around two hours and later discovered he was paying approximately £27 monthly over two years. The ombudsman found that the website application process clearly indicated a credit agreement was being entered into, with PCL's logo, payment options, and credit terms prominently displayed. The ombudsman concluded that proportionate affordability checks were not required to be extensive given the low monthly repayments, and there was insufficient evidence of overindebtedness. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the website application process made it sufficiently clear that Mr R was entering a credit agreement with PCL, with clear labelling, payment options, credit terms, and APR displayed. The ombudsman concluded that proportionate affordability checks were not required to be extensive given the very low proposed repayments of approximately £27 monthly, and there was insufficient evidence of concerning signs of overindebtedness. The ombudsman noted that while bank statements might have led to a different conclusion, reasonable and proportionate checks would not necessarily have extended to obtaining them given the low amount and repayment terms. The ombudsman also found that PCL could not have been aware of Mr R's mental capacity issues as the application was made online, and Mr R had 14 days to cancel.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website