Not upheld: Irresponsible lending complaint against Salary Finance Loans Limited

Decision detail

Summary

Mr N complained that Neyber lent irresponsibly by failing to conduct adequate affordability checks before providing a £5,000 loan in 2019. Neyber verified Mr N's employment and income (£21,000 annually), conducted a credit check, and calculated disposable income at approximately £97 after accounting for existing commitments and expenses. The loan was stated to be for debt consolidation, with consolidation savings of £67 against new repayments of £103. The ombudsman found the initial checks reasonable but noted the very low disposable income and that the loan would increase Mr N's total debt. However, without bank statements to evidence what further verification would have identified, the ombudsman could not conclude the loan was unaffordable and did not uphold the complaint.

The Ombudsman's reasoning

While Neyber's initial checks were reasonable and proportionate given it had access to verified employment and income data, and the credit check raised no concerns, the ombudsman found that the calculated disposable income of approximately £97 was too low to account for unforeseen costs. Additionally, the loan would increase Mr N's total debt and monthly repayments despite the consolidation element. However, the ombudsman concluded that without bank statements to evidence what further verification of expenses would have revealed, and given the stated purpose of debt consolidation with calculated savings of £67, there was insufficient evidence to conclude the loan was unaffordable. The ombudsman found the firm's approach to apportioning the joint mortgage and estimating living expenses reasonable without contrary evidence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website