Not upheld: irresponsible lending complaint against Gain Credit LLC trading as Drafty

Decision detail

Summary

Miss B complained that Drafty irresponsibly provided her with a £1,500 line of credit in May 2025, which required monthly repayments of £85.49 if fully drawn. Miss B subsequently missed payments in October and December 2025 and her account was suspended. Miss B argued that Drafty's checks were inadequate and that adverse information on her credit file (six defaults, most recent 18 months prior) should have prevented lending. The ombudsman found that Drafty's checks were reasonable and proportionate for the early stage of the lending relationship, that the adverse credit information did not warrant declining the application or further investigation, and that Miss B's declared income of £2,315 and adjusted expenses of £1,633 left sufficient funds for the monthly repayment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders are required to take reasonable steps to ensure they do not lend irresponsibly, and that less thorough checks may be reasonable and proportionate at the early stages of a lending relationship. The ombudsman found that Drafty's checks (income/expense declaration and credit file search) were sufficient given the circumstances. Although Miss B had adverse credit history with six defaults, the most recent was 18 months prior, which the ombudsman considered a reasonable timeframe to place less weight on. The ombudsman noted that consumers borrowing from lenders like Drafty commonly have adverse credit information. The monthly repayment of £85.49 represented a small fraction of Miss B's declared income of £2,315, leaving her with sufficient funds after her declared expenses of £1,633. The ombudsman rejected the argument that Drafty should have investigated further, as the checks did not reveal information that would have prompted deeper investigation. The ombudsman also found Drafty's account monitoring and suspension of the account in response to missed payments to be reasonable, and that Drafty was not required to pause credit file reporting during the complaint investigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website