Not upheld: Irresponsible lending complaint against Salary Finance Loans Limited

Decision detail

Summary

Miss O complained that SFL irresponsibly approved a £20,000 consolidation loan in May 2020 despite her having existing financial difficulties and a defaulted account. SFL defended its decision, stating it had conducted thorough financial checks including credit reference agency searches, income verification, and affordability modelling, all of which showed Miss O had sufficient disposable income to meet the new commitment. The ombudsman found that SFL's checks were reasonable and proportionate, the credit searches showed no defaults or CCJs at the time of approval, and Miss O's affordability assessment demonstrated adequate income to service the new loan. The ombudsman noted that while Miss O claimed a default existed, she provided only unclear evidence and no concrete proof, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that SFL's financial checks were reasonable and proportionate, relying on recognised credit sources, application information, and industry standard income verification. The affordability assessment showed Miss O had sufficient disposable income (£520 per month after the new loan commitment) to meet the new borrowing, and this did not account for the substantial savings that would have resulted from using the loan for its intended consolidation purpose. While Miss O claimed a default existed on her credit file, the evidence provided was unclear and no concrete evidence was presented. The ombudsman noted that lenders are reliant on timely reporting to credit agencies and delays or omissions can occur. Bank statements provided showed no obvious signs of financial stress at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website