Not upheld: Irresponsible lending complaint against Salary Finance Limited

Decision detail

Summary

Mr A complained that Salary Finance irresponsibly lent him £3,000 in December 2023. The ombudsman examined Salary Finance's lending checks, which verified Mr A's income of £1,991 per month and confirmed his existing credit commitments of around £32,000 were up to date with no defaults or CCJs. Although Mr A's debt was high relative to his income, he stated the loan was for debt consolidation, which the ombudsman found Salary Finance could reasonably rely upon. Factoring in the expected benefits of debt consolidation, Mr A would have adequate disposable income to repay the loan. The ombudsman concluded Salary Finance did not lend irresponsibly and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Salary Finance's pre-lending checks were reasonable and proportionate. Although Mr A's outstanding debt was high relative to his income, the ombudsman placed weight on his stated purpose of debt consolidation, which Salary Finance could reasonably rely upon without verifying specific debts. The ombudsman considered that if debt consolidation was factored in, Mr A's disposable income would be adequate, and there was nothing to suggest he would be unable to sustainably repay the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website