Upheld: irresponsible lending / inadequate affordability assessment complaint against TANDEM HOME LOANS LIMITED
Financial Ombudsman decision DRN-6175666 of 2026-05-18T00:00:00+00:00. irresponsible lending / inadequate affordability assessment complaint against TANDEM HOME LOANS LIMITED. Outcome: Upheld.
Decision detail
| Reference | DRN-6175666 |
|---|---|
| Decision date | 2026-05-18T00:00:00+00:00 |
| Firm | TANDEM HOME LOANS LIMITED |
| Product | second charge mortgage / secured loan |
| Claim type | irresponsible lending / inadequate affordability assessment |
| Outcome | Upheld |
| Remedy | Tandem must: (1) remove all fees and interest charged on the loan; (2) cease charging any further interest or fees going forward (except the broker fee which is subject to separate complaint); (3) ensure all payments made are applied to reduce capital; (4) update credit files to reflect the updated loan position and remove any adverse information about the loan; (5) work with Mr F and Miss G to agree an affordable repayment plan for the remaining capital balance. Tandem must retain its legal charge over the property until the debt is repaid. No separate compensation for distress and inconvenience is required. |
Summary
Mr F and Miss G complained that Tandem lent them £30,000 irresponsibly in April 2024 for a second charge secured loan to consolidate credit card debt. Tandem conducted an affordability assessment showing disposable income of approximately £660 after essential expenditure and stressed mortgage payments, but did not request bank or credit card statements despite credit file evidence showing a debt cycle: Mr F had recently taken out multiple credit cards and an unsecured loan for consolidation purposes, with high utilisation. The ombudsman found that Tandem should have investigated further given the rapid debt accumulation and multiple recent credit facilities. Bank statements would have revealed Mr F spent over £20,000 on gambling in three months and used credit card cash transfers to fund spending, making the loan unsustainable. The ombudsman upheld the complaint and required Tandem to remove all interest and fees, cease charging interest going forward, update credit files, and work with the borrowers on an affordable repayment plan for the capital.
The Ombudsman's reasoning
Tandem had a duty to lend responsibly and assess affordability on a sustainable basis. While the affordability assessment appeared to show disposable income of around £660 after stressed mortgage payments, the credit file evidence collectively showed a clear debt cycle: Mr F was consolidating loans to repay credit cards, then re-utilising available credit. The rapid increase in debt in recent months, combined with multiple recent credit facilities and high utilisation, raised common sense grounds to doubt the stated reasons for the debt build-up. Tandem should have requested bank statements and credit card statements to investigate further. Had it done so, it would have discovered Mr F's gambling expenditure of over £20,000 in three months and the use of credit card cash transfers to fund spending, making the loan clearly unsustainable. The ombudsman found that by consolidating the credit cards without settling them, Tandem enabled Mr F and Miss G to continue the debt cycle, which materialised in their continued use of revolving credit and missed payments on other debts.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| TANDEM HOME LOANS LIMITED, all decisions | 3 | 67% |
Source
Read the original decision on the Financial Ombudsman Service website