Not upheld: irresponsible lending complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Miss M complained that 118 118 Money irresponsibly lent her six loans between March 2017 and July 2021. The firm upheld her complaint about loan 6 but rejected complaints about loans 1-4 as made too late and did not uphold the complaint about loan 5. The ombudsman found that 118 118 Money conducted proportionate checks showing Miss M had sufficient disposable income to afford each loan repayment, and that the pattern of lending was not concerning as the loans were used for debt consolidation with early repayment and progressive reduction in active credit accounts. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders must take proportionate steps to understand whether consumers can repay without further borrowing or suffering significant adverse consequences. The ombudsman found that 118 118 Money's checks were proportionate given the loan amounts and that Miss M had sufficient disposable income to afford each loan repayment. The pattern of lending was not concerning as the loans were used for debt consolidation, Miss M repaid early, and her credit file showed progressive reduction in active accounts. The ombudsman concluded that even if the firm had verified income on every loan, it would likely have still found Miss M could afford the repayments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website