Upheld: Irresponsible lending complaint against Salary Finance Limited
Financial Ombudsman decision DRN-5868765 of 2026-02-12T00:00:00+00:00. Irresponsible lending complaint against Salary Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-5868765 |
|---|---|
| Decision date | 2026-02-12T00:00:00+00:00 |
| Firm | Salary Finance Limited |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Salary Finance must: (1) Calculate the total amount Mr B received, deduct repayments made, and if Mr B overpaid, refund overpayments with 8% simple interest from the date overpayments were made; if capital remains outstanding, agree an affordable payment plan with Mr B; (2) Remove any adverse information recorded on Mr B's credit file relating to the loan. |
Summary
Mr B complained that Salary Finance irresponsibly provided him with a £4,300 loan in September 2024 for debt consolidation, repayable over 36 months at £153.85 per month. Salary Finance conducted income verification and credit checks, but the resulting income and expenditure assessment showed Mr B would have only approximately £54 in monthly disposable income after all living costs and credit commitments. The ombudsman upheld the complaint, finding that Salary Finance should have realised Mr B was unable to sustainably repay the loan based on the information it gathered. The remedy requires Salary Finance to calculate overpayments with interest, agree an affordable repayment plan for any remaining capital, and remove adverse credit file entries.
The Ombudsman's reasoning
The ombudsman found that while Salary Finance's pre-lending checks were reasonable and proportionate, the information gathered demonstrated that Mr B would be left with insufficient disposable income (approximately £54 per month) to sustainably repay the loan. Although the loan was used for debt consolidation, without a detailed breakdown of the debts being repaid, the ombudsman could not speculate on any financial benefit. Therefore, Salary Finance should have realised the loan was unaffordable before providing it.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Salary Finance Limited, all decisions | 27 | 46% |
| 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