Partially upheld: irresponsible lending - failure to conduct proportionate affordability assessment complaint against I C LOANS LIMITED
Financial Ombudsman decision DRN-6083193 of 2026-05-07T00:00:00+00:00. irresponsible lending - failure to conduct proportionate affordability assessment complaint against I C LOANS LIMITED. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6083193 |
|---|---|
| Decision date | 2026-05-07T00:00:00+00:00 |
| Firm | I C LOANS LIMITED |
| Product | Personal loan |
| Claim type | irresponsible lending - failure to conduct proportionate affordability assessment |
| Outcome | Partially upheld |
| Remedy | Remove all interest, fees and charges applied to loans 5-14 from outset; deduct payments made from £6,520 principal; refund any overpayments with 8% simple interest per annum from date paid; arrange suitable repayment plan for any remaining balance; remove adverse credit file information if balance cleared after adjustments. |
Summary
Mrs W complained that I C LOANS irresponsibly lent to her across 13 loans between June 2019 and November 2024 without proper affordability checks. The ombudsman found loans one to four were fairly lent but upheld the complaint from loan five onwards. At loan five, open banking checks revealed Mrs W's expenditure exceeded her income and overlapping loan terms would extend her indebtedness unsustainably. The firm's reliance on stated purposes and account credit balance was insufficient to override evidence of financial difficulty. I C LOANS was directed to remove all interest, fees and charges from loans 5-14, refund overpayments with interest, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that while loans one to four had proportionate checks given the limited evidence available, from loan five onwards I C LOANS should have recognized that Mrs W was trapped in an unsustainable cycle of borrowing. The open banking data clearly showed expenditure exceeding income, overlapping loan terms would extend indebtedness for nearly two years, and the stated purposes (holidays, Christmas) did not align with the pattern of repeated concurrent borrowing. The firm's reliance on Mrs W's self-declared loan purposes was insufficient to override the objective financial data indicating foreseeable harm from continued lending.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| I C LOANS LIMITED, all decisions | 1 | 50% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website