Not upheld: irresponsible lending - insufficient affordability checks complaint against Western Circle Ltd trading as Cashfloat

Decision detail

Summary

Mr D complained that Cashfloat lent him two £300 loans without conducting sufficient affordability checks. Mr D claimed he was reliant on overdrafts and revolving credit, and was gambling at the time of the applications. Cashfloat conducted income verification, expenditure assessment using trigger values, and credit file reviews before approving both loans. The ombudsman found these checks were proportionate and demonstrated affordability, and that obtaining bank statements would have been disproportionate given the information available to Cashfloat. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Cashfloat's checks were proportionate to the circumstances. Given that only two loans were granted over a short period, early-stage lending with less thorough checks was appropriate. The credit search results did not indicate current financial difficulties as the most recent default was over 3 years old. The ombudsman considered that obtaining bank statements would have been disproportionate given what Cashfloat knew at the time, and therefore Cashfloat could not have been expected to discover the gambling. The affordability assessment showed the loans were sustainable based on the information available to Cashfloat.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website