Partially upheld: irresponsible lending - inadequate affordability checks and unsustainable lending complaint against Fairscore Ltd trading as Updraft
Financial Ombudsman decision DRN-6209556 of 2026-04-21T00:00:00+00:00. irresponsible lending - inadequate affordability checks and unsustainable lending complaint against Fairscore Ltd trading as Updraft. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6209556 |
|---|---|
| Decision date | 2026-04-21T00:00:00+00:00 |
| Firm | Fairscore Ltd trading as Updraft |
| Product | fixed sum loan |
| Claim type | irresponsible lending - inadequate affordability checks and unsustainable lending |
| Outcome | Partially upheld |
| Remedy | Fairscore Limited trading as Updraft must: (1) Rework Loans Two, Three, Four and Five removing all interest and charges; (2) Calculate total repayments Miss M made towards these four loans and deduct from total funds received; (3) If overpayment results, refund with 8% simple interest from date of overpayment; (4) If capital balance remains, arrange affordable payment plan; (5) Remove all adverse credit file information relating to the unfair lending once balance cleared or overpayment refunded. |
Summary
Miss M complained that Fairscore unfairly lent to her by providing five fixed sum consolidation loans between August 2022 and November 2024 without conducting adequate affordability checks. The ombudsman upheld the complaint in relation to Loans Two through Five but not Loan One. While Loan One's checks were reasonable and proportionate, Loans Two-Five should have triggered deeper investigation due to: Miss M's unsecured debt rising from £8,502 to £41,223 in less than two years; disposable income falling to critically low levels (£59-£153) after accounting for new lending; compulsive spending patterns visible on bank statements that Fairscore could access; and a pattern of increasing indebtedness despite consolidation loans indicating Miss M was financially vulnerable. Fairscore must remove interest and charges from Loans Two-Five, refund any overpayments with interest, arrange an affordable payment plan for any remaining capital, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman applied CONC rules requiring reasonable and proportionate checks based on affordability risk. For Loan One, checks were adequate given the circumstances. For Loans Two through Five, the ombudsman found that proportionate checks would have revealed unsustainable lending: Loan Two showed dangerously low disposable income (£59) combined with compulsive spending visible on bank statements and recent additional borrowing; Loan Three showed more than doubled unsecured debt within two years and continued compulsive spending despite recent consolidation; Loans Four and Five showed critically low disposable income (£55 and £86 respectively) and increasing credit commitments despite consolidation loans, indicating Miss M was becoming more indebted and financially vulnerable. The ombudsman rejected Fairscore's argument that rising indebtedness is not determinative, finding instead a clear pattern of increasing financial distress that should have triggered deeper investigation.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairscore Ltd trading as Updraft, all decisions | 20 | 18% |
Source
Read the original decision on the Financial Ombudsman Service website