Not upheld: irresponsible lending - insufficient affordability checks complaint against Quidie Limited trading as Fernovo

Decision detail

Summary

Mr D complained that Quidie Limited provided two payday loans (£200 and £150) without conducting sufficient affordability checks. Quidie assessed Mr D's income at £3,000 per month and outgoings at £2,513 per month (using verified credit commitments and Money Advice Service averages), concluding he had sufficient disposable income. The ombudsman found Quidie's checks were proportionate to the modest loan amounts, including third-party income verification and credit reference agency data, and that the resulting affordability assessment was reasonable. Although Mr D had historical defaults and some missed payments, these were not recent enough or severe enough to trigger additional checks. The complaint was not upheld as Quidie did not lend irresponsibly.

The Ombudsman's reasoning

The ombudsman applied the proportionality principle, finding that for early-stage lending of modest amounts, less thorough checks may be appropriate. Quidie's checks were proportionate: it verified Mr D's declared income through a third-party report, cross-checked expenditure against credit reference agency data and Money Advice Service averages, and conducted credit searches. The resulting calculation showed sufficient disposable income (£3,000 income minus £2,513 outgoings) to afford the repayments. Historical defaults were given less weight due to the 4-year gap, and the limited active payday lending at the time of the first loan did not suggest unsustainability. The ombudsman concluded that obtaining bank statements would have been disproportionate given the modest loan amounts and the results of the checks already conducted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website