Not upheld: irresponsible lending and credit reporting accuracy complaint against Ikano Bank AB (publ)

Decision detail

Summary

Miss C complained that Ikano irresponsibly lent her £2,000 in August 2024 when the loan was unaffordable, and that they reported incorrect information to Credit Reference Agencies. Ikano rejected the complaint, noting Miss C had no missed payments or defaults at application and earned £39,000 annually with £8,000 existing debt. The FOS Investigator initially agreed with Ikano, but Miss C provided additional evidence of missed payments from May-June 2024 on a CRA app. The ombudsman found the affordability checks were proportionate given the loan amount, Miss C's income and debt levels, and absence of adverse credit history at application, and that Ikano's credit reporting was accurate from August 2024 onwards, with earlier missed payments being reported by a separate third-party CRA. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for reasonable and proportionate affordability assessments that are borrower-focused. Given the modest loan amount of £2,000 with no interest, Miss C's salary of £39,000, existing debt of £8,000, and absence of adverse credit history at application, the checks were proportionate and no signs of financial difficulty were evident. The ombudsman found Ikano acted fairly in lending. Regarding credit reporting, Ikano accurately reported the loan from August 2024 onwards, and the earlier missed payments Miss C saw were not reported by Ikano but by a third-party CRA. The ombudsman noted that Miss C's personal circumstances, while sympathetic, were not known to Ikano at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website