Not upheld: irresponsible lending / unaffordable loan complaint against Madison CF UK Limited (trading as 118 118 Money)

Decision detail

Summary

Miss C complained that 118 118 Money irresponsibly lent her £3,000 in March 2023 when she could not afford the £135.62 monthly repayments, claiming she was already struggling with existing debts. The ombudsman reviewed the credit checks and affordability assessment conducted by 118 118 Money, which showed Miss C had historic defaults and missed payments but had brought accounts up to date by application time with low total outstanding balances. Finding the checks proportionate for an early lending relationship and the repayments affordable based on validated income, the ombudsman rejected the complaint, noting that even more extensive checks would likely not have changed the lending decision. The ombudsman reminded the firm of its obligation to exercise forbearance given Miss C's subsequent financial difficulties.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to irresponsible lending, finding that 118 118 Money's checks were proportionate for an early-stage lending relationship. While historic adverse information existed, it was dated and Miss C's accounts were current at application. The monthly repayments of £135.62 appeared affordable relative to validated income. Even if checks should have extended to actual living expenses, the information provided by Miss C suggested this would not have demonstrated unaffordability. Bank statements were not required as the loan had relatively low monthly payments and Miss C had no recent significant adverse information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website