Not upheld: Irresponsible lending complaint against Hastings Financial Services Limited

Decision detail

Summary

Miss E complained that Hastings Direct irresponsibly lent her £10,000 for debt consolidation when she was already heavily indebted and the loan only reduced her monthly commitments by £11. She argued the lender overstated her income by including irregular overtime and failed to request evidence of her actual income and outgoings. Hastings Direct maintained it conducted adequate proportionate checks including income verification through external tools and credit checks. The ombudsman found the lender's checks were proportionate and its lending decision fair, as it had independently verified Miss E's income through external sources that aligned with her declaration, and was not obliged to request additional evidence. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Hastings Direct's checks were proportionate given the loan value and repayment amount relative to verified income. The lender was not obliged to request evidence of actual income as it had independently verified Miss E's declared income through an external tool, which aligned with her declaration. The use of national statistics to estimate living expenses was reasonable. Although the loan provided only an £11 monthly benefit, this was still a gain and the lender was entitled to rely on the stated debt consolidation purpose without evidence of prior consolidation failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website