Not upheld: irresponsible lending, Section 75 claim (breach of contract/misrepresentation), mis-sale of finance complaint against Premium Credit Limited

Decision detail

Summary

Miss M complained to the Financial Ombudsman Service about Premium Credit Limited regarding a credit agreement taken out on 2 May 2025 to fund a course. She raised two main issues: first, a Section 75 claim alleging the course provider breached contract or misrepresented the service (regarding AI flagging of an assignment, lack of tutor support, and inability to cancel); and second, that the credit agreement was irresponsibly lent as she was on Universal Credit and suffered from poor mental health. The ombudsman found that while the Section 75 requirements were met, there was insufficient evidence of breach or misrepresentation, as the AI flagging was consistent with course terms, the cancellation request was made outside the 14-day period, and tutor support allegations lacked substantiation. Regarding irresponsible lending, the ombudsman determined that Miss M could afford the monthly repayments of £65 based on her financial position (income of £700, committed outgoings of £130), and rejected the argument that lending to someone on benefits was inherently inappropriate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a two-part analysis. First, regarding the Section 75 claim, the ombudsman found that while the requirements for a valid Section 75 claim were met, there was insufficient persuasive evidence of breach of contract or misrepresentation by the course provider. The AI flagging was consistent with the course terms and conditions; the cancellation request was made outside the 14-day period; and the tutor support allegations lacked specific substantiation and were inconsistent. Second, regarding irresponsible lending, the ombudsman found that although it was unclear whether PC carried out fully proportionate checks, an assessment of Miss M's actual financial position showed she could afford the monthly repayments (£65 per month against income of £700 and committed outgoings of £130). The ombudsman rejected the argument that lending to someone on benefits was inherently inappropriate, and found no evidence of pressure or mis-selling during the sales process.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website