Not upheld: Irresponsible lending complaint against Intrum Mortgages UK Finance Limited

Decision detail

Summary

Mr and Mrs W complained about a second charge loan taken out in 2007 with Picture for £70,000, which was later transferred to Intrum in 2019. They alleged the original lending decision was irresponsible and that their income information was misrepresented. Additionally, they complained about interest rates applied by Intrum between 2019 and 2023. While Intrum acknowledged and remedied the interest rate issue by refunding overpaid interest plus 8% simple interest and paying £500 compensation, the ombudsman found insufficient evidence to determine that the original lending decision was irresponsible or created an unfair relationship. The ombudsman noted that Mr and Mrs W mostly afforded the payments, with only temporary difficulties due to identifiable changes in circumstances, and concluded the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found insufficient evidence to determine that the original lending decision was irresponsible or created an unfair relationship. While Mr and Mrs W provided some information about their income at the time (approximately £30,000 joint earned income), this was not enough to establish what an affordability check would have shown in 2007. The fact that Mr and Mrs W mostly afforded the payments, with only temporary difficulties due to identifiable changes in circumstances, did not indicate the loan was unaffordable when advanced. Regarding the interest rate issue, Intrum had already appropriately remedied this by refunding overpaid interest plus interest at 8% simple per year and paying £500 total compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website