Not upheld: Irresponsible lending complaint against Inclusive Finance Limited

Decision detail

Summary

Miss B complained that Creditspring irresponsibly lent to her across three loans (£200, £200, and £600) despite her being in a debt management plan and having previous defaults and a recent CCJ. Creditspring assessed affordability based on declared income and expenses, finding sufficient surplus income for each loan. The ombudsman found the proportionate checks adequate for the first two smaller loans but acknowledged more checks should have been done for loan three due to the recent CCJ. However, the ombudsman concluded that further checks would likely have confirmed Miss B's ability to repay, as her disposable income of approximately £1,170 monthly could cover the £120 monthly repayment (10% of disposable income). The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the proportionate checks standard, noting that for lower loan amounts with sufficient surplus income, fewer checks are required. For loans one and two (£200 each), the surplus income and absence of recent adverse credit made lending fair. For loan three (£600), while a CCJ within the last year should have prompted more checks (such as bank statements), the ombudsman found that such checks would likely have shown Miss B could afford the £120 monthly repayment from her £1,170 disposable income. The existence of a CCJ should not in isolation prevent credit access; the overall circumstances assessment showed sustainable repayment ability. The last default being 38 months prior and increased income also supported the lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website