Not upheld: irresponsible lending complaint against Fairscore Ltd trading as Updraft

Decision detail

Summary

Mr W complained that Fairscore Ltd trading as Updraft lent irresponsibly when providing two personal loans (£6,000 in November 2022 and £7,200 in July 2023), arguing that more thorough checks would have revealed his gambling addiction. Updraft upheld the complaint regarding loan two and refunded all interest while setting the rate to 0%, but did not uphold the complaint for loan one. The ombudsman found that Updraft's pre-lending checks for loan one were reasonable and proportionate, using verified income and credit reference agency data that showed no adverse markers. Although sympathetic to Mr W's gambling issues, the ombudsman determined that Updraft was not required to conduct further checks beyond standard credit inquiries, as the gambling activity was not visible in the information available to the lender. The complaint was not upheld, and the ombudsman confirmed that Updraft's redress for loan two was fair and consistent with FOS guidance.

The Ombudsman's reasoning

For loan one, the ombudsman found that Updraft's checks were reasonable and proportionate given the loan size. The firm verified income, reviewed CRA data, and calculated affordability using worst-case figures where discrepancies existed. Although Mr W provided evidence of significant gambling activity through bank transfers, the ombudsman determined that Updraft was not required to conduct further checks beyond standard credit checks, as the CRA information showed Mr W was managing his accounts well with no recent adverse markers. The ombudsman noted that while sympathetic to Mr W's gambling issues, it would not be fair to place weight on bank statement content that was not visible to the lender at the time of the lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website