Upheld: irresponsible lending - failure to conduct proportionate affordability assessment complaint against Jaja Finance Ltd
Financial Ombudsman decision DRN-6046969 of 2026-05-20T00:00:00+00:00. irresponsible lending - failure to conduct proportionate affordability assessment complaint against Jaja Finance Ltd. Outcome: Upheld.
Decision detail
| Reference | DRN-6046969 |
|---|---|
| Decision date | 2026-05-20T00:00:00+00:00 |
| Firm | Jaja Finance Ltd |
| Product | Credit card |
| Claim type | irresponsible lending - failure to conduct proportionate affordability assessment |
| Outcome | Upheld |
| Remedy | Jaja Finance Ltd must: (1) add up total repayments Mrs B made and deduct from total amount borrowed; (2) if Mrs B overpaid, refund overpayments plus 8% simple interest per year from date of overpayment until settlement and remove all adverse credit file information; (3) if capital balance remains, arrange an affordable payment plan with Mrs B and remove adverse credit file information once cleared. Jaja must provide a tax certificate if requested. |
Summary
Mrs B complained that Jaja Finance Ltd irresponsibly provided her with a £2,200 credit card in September 2025. Jaja conducted an affordability assessment using Mrs B's declared annual income of £90,000 (£5,230 monthly) without verification, concluding she had approximately £900 monthly disposable income. However, the ombudsman found that given Mrs B's high existing debt (£1,892 monthly loan repayments and £25,562 revolving credit identified through CRA checks), income verification was proportionate and necessary. Review of Mrs B's actual payslips showed net monthly income of approximately £4,168, which when properly assessed left no disposable income after non-discretionary costs. The ombudsman upheld the complaint, finding the credit card should not have been provided, and ordered Jaja to refund interest and charges, with any overpayments receiving 8% simple interest, or arrange an affordable repayment plan for any remaining balance.
The Ombudsman's reasoning
The ombudsman found that Jaja failed to conduct a proportionate affordability assessment as required by regulations. While lenders may rely on customer-provided information in some circumstances, the high level of existing debt identified through CRA checks necessitated income verification. The ombudsman reviewed Mrs B's actual payslips and found her net monthly income was approximately £4,168, not the £5,230 used by Jaja. This material difference meant that after accounting for all non-discretionary costs, Mrs B had no disposable income remaining, making the credit card repayments unaffordable. Had Jaja performed proportionate checks using actual income figures, it would have concluded the credit was unaffordable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Jaja Finance Ltd, all decisions | 117 | 24% |
| Credit card, all decisions | 25,211 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website