Not upheld: irresponsible lending - insufficient affordability checks complaint against Gain Credit LLC trading as Lending Stream

Decision detail

Summary

Miss B complained that Lending Stream lent to her irresponsibly by failing to conduct sufficient affordability checks, despite her reliance on payday lending and repeated borrowing pattern. She took out 8 loans between June 2022 and December 2024, with loans 1-3 overlapping and her overall debt growing to over £5,300. The ombudsman found that Lending Stream's checks—including income verification, statistical outgoings analysis, and credit searches showing no defaults or missed payments—were proportionate and adequately demonstrated affordability. The ombudsman rejected arguments that the overlapping loans or repeat borrowing pattern alone should have triggered more extensive checks, and treated the lending as two separate chains due to the six-month break between loans 5 and 6. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a proportionality test to affordability checks, finding that early-stage lending relationships may justify less thorough checks. While acknowledging factors that might trigger more detailed checks (low income, high repayments, repeated borrowing, quick return for loans), the ombudsman concluded that Lending Stream's checks were proportionate given the modest loan amounts, Miss B's declared income levels, and the absence of any red flags in credit searches. The ombudsman treated the lending as two separate chains due to the six-month break, resetting the lending history for loans 6-8. The ombudsman rejected the argument that overlapping loans alone should have prevented lending, noting there is no regulatory prohibition on concurrent lending and the combined repayments remained modest. The ombudsman also found that Lending Stream could not have known Miss B was juggling other credit to make repayments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website