Not upheld: irresponsible lending - affordability assessment complaint against Evergreen Finance London Limited trading as MoneyBoat.co.uk

Decision detail

Summary

Mr E complained that MoneyBoat irresponsibly lent him £750 in February 2023 by failing to conduct adequate affordability checks. MoneyBoat verified his income of £1,500 through a credit reference agency, assessed his expenditure at £850 (including statistical adjustments), and identified approximately £650 in monthly disposable income. A credit check showed no arrears, missed payments, or insolvencies, though his credit card had been near limits previously. The ombudsman found the checks were proportionate for a small, short-term first loan and that MoneyBoat reasonably concluded the £224.20 monthly repayments were affordable. Although Mr E later experienced difficulties, the ombudsman found no information available to MoneyBoat at the time that should have prompted more detailed enquiries or refusal to lend. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to irresponsible lending, requiring MoneyBoat to conduct proportionate checks appropriate to the loan size, duration, and cost. Given this was a relatively small £750 loan over six months as Mr E's first loan with MoneyBoat, less detailed checks were proportionate. MoneyBoat's verification of income through a credit reference agency was reasonable and industry-standard. The upward adjustment of expenditure using statistical data was justified as there was no evidence suggesting the data was unrepresentative of Mr E's situation. The credit check revealed no red flags such as arrears, missed payments, or insolvencies. Although Mr E's credit card was near limits, it had been brought within limit and maintained for two months before lending with no missed payments. Based on the information gathered, Mr E appeared to have £650 monthly disposable income against £224.20 repayments, making the loan affordable on a pounds and pence basis. While Mr E may have experienced difficulties later, the ombudsman found no information available to MoneyBoat at the time that should have alerted it to sustainability concerns.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website