Not upheld: irresponsible lending - insufficient affordability checks complaint against Gain Credit LLC trading as Lending Stream

Decision detail

Summary

Mr G complained that Lending Stream lent him three short-term loans (£180, £200, £200) between October-November 2022 without conducting sufficient affordability checks, citing his credit file defaults, delinquent accounts, gambling activity, and quick succession of overlapping loans. Lending Stream verified Mr G's income through third-party tools and open banking checks, cross-checked outgoings against population statistics and credit search data, and obtained credit searches showing historic but aged defaults. The ombudsman found the checks proportionate and determined it would have been disproportionate to require bank statement verification to discover gambling at this early stage of the lending relationship. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that Lending Stream's affordability checks were proportionate to the circumstances. The firm verified Mr G's declared income through third-party tools and open banking checks, cross-checked outgoings against population statistics and credit search data, and obtained credit searches. While the credit reports showed historic defaults, these were sufficiently old (most from 2017-2020, most recent 16 months prior) and not indicative of current financial difficulties. The ombudsman found it would have been disproportionate to require bank statement verification at this early stage of the lending relationship, and therefore Lending Stream could not reasonably have discovered the gambling. The total capital lent and combined repayments were not significant enough to raise concerns, and Mr G's repayment history up to March 2023 showed no signs of unsustainability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website