Not upheld: irresponsible lending - inadequate affordability checks complaint against Fairscore Ltd trading as Updraft

Decision detail

Summary

Ms H complained that Updraft irresponsibly lent to her by failing to conduct adequate affordability checks on two unsecured loans (£9,000 in November 2022 and £10,000 in January 2025), claiming she was experiencing financial difficulty and was reliant on credit. Updraft maintained that their affordability assessments showed both loans were affordable based on available information. The ombudsman found that Updraft's checks were reasonable and proportionate, with verified income, no adverse credit information, and good repayment history on the first loan supporting the lending decisions. Although Ms H later experienced financial difficulty, information about additional borrowing and higher housing costs was not reflected in her credit file, so the lender could not reasonably have been expected to discover it. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied CONC regulations requiring reasonable and proportionate affordability assessments to ensure sustainable repayment without undue difficulty. For the first loan, the checks were proportionate given the loan amount, Ms H's verified income, absence of adverse credit information, and stated intention to clear overdraft. For the second loan, the checks remained reasonable given increased income, good repayment history on the first loan, early settlement, and no signs of financial difficulty in the credit file. The ombudsman found that information about additional borrowing and higher housing costs was not reflected in Ms H's credit file, so Updraft could not reasonably have been expected to discover it. The repayments appeared affordable at the time of each application based on the evidence available to the lender.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website