Not upheld: irresponsible lending complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Mr S complained that 118 118 Money irresponsibly lent him two personal loans in July 2020 (£1,000) and November 2021 (£1,505.58), claiming he was vulnerable due to gambling addiction and ADHD. The ombudsman examined whether the firm conducted proportionate affordability checks and found that for both loans, the firm's checks showed Mr S had sufficient disposable income to repay. Although Mr S's bank statements revealed significant gambling transactions, the ombudsman concluded the firm was not required to obtain bank statements and was unaware of Mr S's gambling problem or ADHD diagnosis as he did not disclose these. The complaint was not upheld as the firm's lending decisions were based on reasonable checks and available information.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders must take proportionate steps to understand whether consumers can repay without borrowing further or suffering significant adverse consequences. For loan 1, the ombudsman found that 118 118 Money's checks were reasonable and showed Mr S had sufficient disposable income (around £120) after repayments, with the loan representing less than 10% of monthly income. For loan 2, although income verification was unclear, Mr S's bank statements showed increased income and sufficient funds to repay. The ombudsman concluded that while Mr S's gambling addiction and ADHD were significant concerns, 118 118 Money was not aware of these issues and was not required to discover them through bank statement verification, particularly as Mr S did not disclose them. Therefore, the firm could not be expected to take these factors into account in its lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website