Not upheld: irresponsible lending complaint against Creation Consumer Finance Limited

Decision detail

Summary

Mr A complained that Creation irresponsibly lent him £9,000 in May 2025 with 60 monthly instalments of £197.82, claiming the loan was unaffordable. Creation had obtained Mr A's declared income (£38,000 annually), verified it against bank deposits, gathered expenditure information, and conducted a credit search showing no adverse history. The ombudsman found the checks were proportionate and the loan appeared affordable based on the information available at the time, with existing debts being reasonable relative to income. Although Mr A subsequently experienced payment difficulties and contemplated an IVA, the ombudsman concluded Creation could not have foreseen this deterioration and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman concluded that Creation's checks were proportionate for the early stage of the lending relationship. The loan amount of £9,000 with monthly payments of approximately £200 was reasonable given Mr A's declared income of £38,000 annually. The existing debt was not excessive in comparison to income and was being reasonably managed. Although Mr A later experienced difficulty, the ombudsman found no evidence that Creation could have known circumstances would deteriorate or that further checks would have revealed unaffordability at the time of lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website