Partially upheld: irresponsible lending - inadequate affordability checks complaint against East End Fair Finance Limited trading as Fair Finance
Financial Ombudsman decision DRN-6150832 of 2026-05-05T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against East End Fair Finance Limited trading as Fair Finance. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6150832 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | East End Fair Finance Limited trading as Fair Finance |
| Product | high-cost short-term loan |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Partially upheld |
| Remedy | Fair Finance must: (1) calculate total payments Mrs S made on loans three and four and deduct from total funds received; (2) if Mrs S overpaid, refund the difference plus 8% simple interest per year from date of each overpayment; (3) remove all adverse credit file information recorded after 5 March 2025 for these accounts; (4) if outstanding balance remains, arrange an affordable repayment plan and remove adverse information once cleared; (5) if debt sold to third party, either buy back the debt or ensure third party carries out the redress. |
Summary
Mrs S complained that Fair Finance irresponsibly lent to her through four loans between January and March 2025, when she was struggling with mental health issues, gambling heavily, and unable to sustainably repay. Fair Finance had conducted income verification, expenditure analysis, and credit checks, but the ombudsman found these checks were not proportionate to the circumstances of rapid repeat high-cost borrowing. When the ombudsman reviewed additional bank statements, they revealed Mrs S's actual essential spending was significantly higher than Fair Finance estimated and showed extensive gambling activity. The ombudsman upheld the complaint in relation to loans three and four, finding Fair Finance should have discovered this information through more thorough checks and that further lending was reasonably foreseeable to cause avoidable harm. Fair Finance was ordered to refund interest and charges on these loans, arrange affordable repayment for any remaining balance, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that while Fair Finance conducted a fairly comprehensive set of checks, they were not proportionate to the circumstances. Fair Finance had visibility of only some of Mrs S's bank accounts and relied on statistical estimates for essential spending rather than investigating actual spending, particularly given this was the third and fourth loans in quick succession at very high interest rates and Mrs S had recently borrowed £1,300 from other lenders. When the ombudsman reviewed additional bank statements, it became clear that Mrs S's non-discretionary expenditure was significantly higher than Fair Finance estimated, and more importantly, the statements evidenced extensive gambling. In this context, further lending was reasonably foreseeable to cause Mrs S avoidable harm. Fair Finance should have gained a clearer picture of Mrs S's spending by considering transactions through her other accounts before approving loans three and four.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| East End Fair Finance Limited trading as Fair Finance, all decisions | 5 | 60% |
Source
Read the original decision on the Financial Ombudsman Service website