Not upheld: irresponsible lending complaint against Plata Finance Limited

Decision detail

Summary

Miss K complained that Plata Finance irresponsibly lent her £7,000 in December 2022, arguing that a CCJ on her credit file indicated significant financial difficulty and that she could not afford the loan with its high interest rate. Plata Finance conducted checks including verification of income via Open Banking (£1,745 monthly), adjustment of expenditure using ONS data, and a credit search showing only £1,128 unsecured debt with well-maintained accounts. The credit search did not reveal the CCJ that appeared on Miss K's own credit file from August 2022. The ombudsman found that Plata Finance carried out proportionate checks and lent responsibly based on the information available at the time, declining to apply hindsight regarding the missing CCJ, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Plata Finance carried out reasonable and proportionate checks by obtaining verified income data via Open Banking, adjusting expenditure estimates using ONS data, and conducting a credit search. The credit search at the time of lending did not reveal the CCJ that appeared on Miss K's own credit file, and the ombudsman declined to apply hindsight in assessing the adequacy of the search. Based on the information available to Plata Finance, Miss K appeared to have sufficient disposable income to meet repayments sustainably, was not over-indebted, showed no signs of financial difficulty, and maintained well-managed accounts. The ombudsman concluded that Plata Finance was entitled to rely on the credit search results without cross-referencing them, as it had no cause to suspect the data was inaccurate at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website