Not upheld: irresponsible lending / unaffordable lending complaint against PDL Finance trading as Mr Lender

Decision detail

Summary

Mr H complained that PDL Finance irresponsibly lent him £400 (Loan 2) in September 2025 without conducting sufficient affordability checks, particularly given his recent payday borrowing and existing debt. PDL Finance verified his declared income of £2,950 using open banking data and assessed his expenditure at £1,584, leaving apparent disposable income of £1,366. The ombudsman found that PDL Finance's proportionate checks were reasonable for a small, short-term loan and that the loan appeared affordable based on the information gathered. Although the ombudsman acknowledged that more detailed analysis might have revealed Mr H's actual financial difficulties, such forensic checks were not proportionate in these circumstances. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that PDL Finance carried out proportionate checks appropriate to the circumstances: a relatively small £400 loan over a short 6-month term. The firm reasonably verified Mr H's declared income using open banking data and assessed expenditure using a combination of Mr H's declarations and ONS data. Based on the information gathered, the loan appeared affordable with £1,366 monthly disposable income against repayments of £149.12. While the ombudsman acknowledged that more forensic analysis (such as detailed bank statement review) might have revealed Mr H's actual financial difficulties and higher debt levels, such detailed checks were not proportionate given the loan size and term. The credit check revealed no concerning indicators. The ombudsman noted that affordability on a pounds and pence basis, while not determinative of sustainability, combined with the other factors supported the lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website