Not upheld: Irresponsible lending complaint against Hastings Financial Services Limited

Decision detail

Summary

Mr T complained that Hastings Direct lent to him irresponsibly in March 2024 by failing to conduct appropriate affordability checks on a £10,000 fixed sum loan. Mr T subsequently fell into financial difficulty and believed the loan should never have been approved. Hastings Direct used Mr T's application information, credit reference agency data, and ONS statistics to calculate he would have £1,261.70 monthly disposable income after all repayments. The ombudsman found the affordability checks were proportionate and fair, with sufficient disposable income evident at the time of lending, and no financial difficulty apparent on Mr T's credit file. The complaint was not upheld as Hastings Direct made a fair lending decision based on the information available at the time.

The Ombudsman's reasoning

The ombudsman found that Hastings Direct carried out proportionate affordability checks appropriate to the circumstances. The checks were borrower-focused and considered whether Mr T could repay sustainably. Using the information available at the time of lending, Mr T had sufficient disposable income (£1,261.70 monthly) to repay the loan, whether using his declared mortgage amount or the actual CRA-reported amount. The ombudsman distinguished between Mr T's current financial difficulty (which occurred after lending) and what was evident at the time of the lending decision. The settled payday lending from two years prior, with no other adverse information, did not put Hastings Direct on notice of financial struggle.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website