Not upheld: Irresponsible lending complaint against Plata Finance Limited

Decision detail

Summary

Mr M complained that Plata Finance Limited irresponsibly lent to him by providing two loans: a £10,000 loan in July 2024 and an £11,376.42 top-up loan in June 2025. Mr M argued that Plata should have discovered through more thorough checks that he was gambling, had high existing credit commitments, and was overdraft dependent. The ombudsman found that Plata's checks were reasonable and proportionate, verifying income through payslips and bank statements, conducting credit checks, and assessing affordability against declared and statistical expenditure data. Although the ombudsman acknowledged that certain factors warranted careful review, it concluded that the information available showed Mr M had sufficient income to afford the repayments and that further checks would not have revealed the lending was unsustainable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Plata's checks were reasonable and proportionate for both loans. For loan one, although Plata could have asked Mr M about essential expenditure rather than relying solely on ONS data, the available information showed sufficient disposable income to afford repayments. For loan two, Plata obtained more thorough information including bank statements, and despite indicators warranting careful review (high existing commitments, cash advances, short time since previous loan), the information gathered showed Mr M had sufficient income to meet all commitments and repayments. The ombudsman acknowledged Mr M's gambling but concluded it was not visible at the level that would have made lending unsustainable, and that bank statement review would not have been a proportionate requirement at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website