Not upheld: irresponsible lending and affordability complaint against Fairscore Ltd (trading as Updraft)

Decision detail

Summary

Mr G complained that Updraft irresponsibly lent him £3,000 in December 2024 without carrying out adequate affordability checks. Updraft verified Mr G's income via open banking, obtained expenditure information, and conducted credit searches showing no significant adverse information. The ombudsman found that Updraft's checks were reasonable and proportionate for the early stage of the lending relationship and that the information suggested Mr G could afford the repayments. Although Mr G later reported difficulty making payments, the ombudsman concluded that Updraft could only make decisions based on available information and was reasonably entitled to believe the loan would be used to consolidate existing debts at higher interest rates, which would have improved Mr G's financial position. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Updraft conducted reasonable and proportionate checks appropriate for the early stage of the lending relationship. The open banking verification of income, expenditure information, and credit search results all suggested Mr G could afford the repayments. The ombudsman noted that Updraft could only make decisions based on information available at the time and could not know whether Mr G would fail to consolidate debts as stated. Since Mr G had no history of defaulting on Updraft loans, the lender was reasonably entitled to believe the funds would be used for the stated purpose, which would have left Mr G in a better financial position.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website