Not upheld: irresponsible lending / unaffordable lending complaint against Lendable Ltd

Decision detail

Summary

Mr F complained that Lendable irresponsibly lent him £4,500 in March 2018 for debt consolidation, arguing the loan was unaffordable in the context of his wider financial position despite appearing affordable in isolation. Lendable verified Mr F's declared income of £45,000 through a credit reference agency and conducted a credit file search showing total debt of £5,204 across seven accounts with no arrears or payment problems, and 45% revolving credit utilisation. The ombudsman found that Lendable carried out proportionate checks given the loan size, Mr F's income level, and the fact it was his first loan with Lendable, and that the information gathered did not indicate he would struggle to afford the £157.01 monthly repayment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Lendable carried out proportionate checks given the circumstances: the loan amount was not particularly large relative to Mr F's income, it was Lendable's first loan to him, and his financial situation appeared stable. The income verification through a credit reference agency was acceptable industry practice. The credit search showed no arrears, payment problems, or concerning levels of indebtedness (45% revolving credit utilisation). While Mr F had prior payday lending history from 2012-2013, this was several years prior and he had been maintaining commitments well since then, so Lendable could reasonably conclude previous difficulties were not representative of his current situation. The monthly repayment of £157.01 appeared affordable on a pounds and pence basis with sufficient headroom. The stated purpose of debt consolidation was reasonable and Mr F had no history of failing to consolidate. Although a more forensic analysis of bank statements might have revealed a different picture, the ombudsman concluded this level of detail was not proportionate given the loan size and Mr F's apparent financial stability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website