Not upheld: irresponsible lending complaint against My Finance Club Limited (trading as Myfinanceclub)

Decision detail

Summary

Miss R complained that MFC lent to her irresponsibly across three short-term loans. The ombudsman found that while MFC's affordability assessments for Loans 1 and 2 were not fully proportionate—failing to verify unrealistically low rent and utility figures and using declared rather than actual credit commitment costs—the loans were nonetheless affordable based on Miss R's actual financial circumstances. For Loan 3, approved after a nearly two-year gap, MFC conducted proportionate checks appropriate for a new customer applying for a small £150 loan. The ombudsman rejected Miss R's argument that the late repayment of Loan 2 should have influenced the Loan 3 decision, finding the gap too substantial. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while MFC's affordability checks for Loans 1 and 2 were not fully proportionate—particularly in failing to verify unrealistically low rent and utility figures and in using Miss R's declared rather than actual credit commitment costs—the loans were nonetheless affordable. The ombudsman's own analysis of Miss R's actual expenditure (approximately £460 monthly for rent, bills, and transport, plus verified credit commitments) demonstrated sufficient disposable income to cover the loan repayments. For Loan 3, after a nearly two-year gap, MFC appropriately treated Miss R as a new customer and conducted proportionate checks for the small £150 loan amount. The late repayment of Loan 2 was not considered proximate enough to influence the Loan 3 decision nearly two years later.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website