Partially upheld: irresponsible lending complaint against Plata Finance Limited
Financial Ombudsman decision DRN-6261298 of 2026-04-16T00:00:00+00:00. irresponsible lending complaint against Plata Finance Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6261298 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | Plata Finance Limited |
| Product | loan |
| Claim type | irresponsible lending |
| Outcome | Partially upheld |
| Remedy | Plata Finance Limited must refund all interest, fees and charges applied to loan 2. If Mr C paid more than received, refund overpayments plus Bank of England base rate plus 1% simple interest per year from date of overpayment. If capital balance remains, arrange affordable payment plan. Remove all adverse information regarding loan 2 from Mr C's credit file upon completion. |
Summary
Mr C complained that Plata Finance Limited lent irresponsibly when approving two loans in May 2024 (£3,000) and July 2025 (£5,000). The ombudsman found loan 1 was approved reasonably based on verified income and proportionate checks. However, the complaint about loan 2 was upheld because Mr C's unsecured debt increased by £9,000 in 13 months with new accounts opened, which should have triggered more detailed checks. Bank statements revealed Mr C was gambling heavily with losses around £2,900 monthly, making the loan unsustainable. Plata was directed to refund all interest, fees and charges on loan 2 and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman applied the regulatory requirement that lenders must complete reasonable and proportionate checks before lending. For loan 1, the checks were proportionate given the loan amount, Mr C's verified income, absence of adverse credit history, and mortgage-free status. For loan 2, the significant increase in unsecured debt (£9,000 in 13 months) and opening of new accounts should have triggered more detailed checks. Bank statement review would have revealed harmful gambling activity making the loan unsustainable, therefore loan 2 was lent irresponsibly.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Plata Finance Limited, all decisions | 67 | 18% |
Source
Read the original decision on the Financial Ombudsman Service website