Partially upheld: misleading pre-approved loan offer and discretionary credit limit increase complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Mr T complained that he received a misleading pre-approved loan offer for £3,000 on the 118 118 Money app, which resulted in an error when he tried to apply, and that he had not been offered a credit limit increase on his credit card. The ombudsman partially upheld the complaint, finding that whilst pre-approved loans are not guaranteed, the firm should not have shown the offer to Mr T as it knew he had applied for and been declined a loan within the past 6 months, making him ineligible. The ombudsman ordered the firm to send an apology email. The credit limit increase complaint was not upheld as credit limit increases are within the lender's sole discretion.

The Ombudsman's reasoning

The ombudsman agreed that whilst pre-approved loans are not guaranteed and are subject to further verification, 118 118 Money should not have displayed the pre-approved loan offer to Mr T when it already knew he was ineligible due to a loan application within the past 6 months. This caused Mr T false hope and frustration. However, regarding the credit limit increase, the ombudsman found that credit limit increases are solely within the lender's discretion and the firm had not acted unfairly by not offering one.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website