Not upheld: irresponsible lending - inadequate affordability checks complaint against Plata Finance Limited

Decision detail

Summary

Miss P complained that Plata Finance Limited irresponsibly lent her £20,000 in July 2025 without conducting adequate affordability checks. Plata verified her income of £4,746 monthly, conducted a credit check showing no adverse history, and calculated she would have £1,912 remaining monthly after all expenses and loan repayments. The ombudsman found the checks were proportionate to the loan amount, showed no signs of financial distress, and indicated sustainable affordability, therefore rejecting Miss P's complaint. The ombudsman also noted that Plata could not have known about Miss P's subsequent scam victimization at the time of lending.

The Ombudsman's reasoning

The ombudsman applied the proportionality test for affordability checks, considering the loan amount, repayment size, cost of credit, and consumer circumstances. The credit check revealed no financial distress, adverse entries, or over-reliance on credit. The affordability assessment showed a substantial monthly buffer of £1,912 after all expenses and loan repayments, indicating sustainable affordability. No further checks such as bank statements were required given the proportionate nature of the checks already completed and their positive findings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website