Not upheld: irresponsible lending complaint against My Finance Club Limited

Decision detail

Summary

Mr B complained that My Finance Club Limited lent to him irresponsibly by providing two £250 loans in February and April 2025. While Mr B repaid the first loan on time, he defaulted on the second loan which was due in July 2025 and remained unpaid into 2026. Mr B argued that MFC should have discovered his actual financial difficulties, including persistent overdraft usage and reliance on credit, which he conceded were not reflected in the financial information he provided on his application. The ombudsman found that MFC's pre-lending checks were reasonable and proportionate, including verification of income and credit reference searches, and that the firm had no reason to request bank statements or conduct further investigation based on the information available at the time of lending. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that MFC's checks were reasonable and proportionate for loans of £250 each. The firm verified Mr B's income through bank reports, conducted credit reference searches, and calculated that he had sufficient income to make the required monthly contributions. Although Mr B had a history of defaulted accounts, these were several years old and would not have prompted further investigation. The ombudsman noted that the regulatory framework does not expect lenders to request bank statements early in a lending relationship, and MFC had no reason to suspect Mr B would be unable to sustainably repay the loans based on the information gathered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website