Not upheld: irresponsible lending / unaffordable lending complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Miss C complained that 118 118 Money irresponsibly lent her £3,000 when she was unable to afford the repayments and had existing debts. She argued the affordability assessment did not reflect her true circumstances. The ombudsman found that while 118's checks were not as thorough as they could have been, the available information at the time indicated the loan was affordable, with Miss C having approximately £414 disposable income monthly after all commitments. Although Miss C subsequently experienced financial difficulty and made no repayments, the ombudsman concluded this was not foreseeable from the information available at the time of lending, and therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while 118's checks were not as thorough as they could have been given the tight disposable income margin of approximately £110 monthly, a hypothetical deeper investigation using bank statements would likely have shown Miss C had approximately £414 disposable income monthly after all committed expenditure. This would have supported the affordability of the loan. The information available to 118 at the time of lending did not indicate Miss C was struggling financially, and her previous financial difficulties had been resolved with recent accounts appearing stable and well-managed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website