Not upheld: irresponsible lending complaint against Oakbrook Finance Limited trading as Finio Loans

Decision detail

Summary

Mr R complained that Finio lent irresponsibly when approving his £4,500 loan application in April 2023. Mr R had stated income of £3,700 (verified via CATO), existing debts of £7,800 with no adverse credit history, and the affordability assessment calculated disposable income of £1,840 after all outgoings. Mr R later disclosed he had a serious gambling problem and quickly lost the borrowed funds, leading to arrears and default. The ombudsman found that Finio's checks were proportionate and reasonable based on the information available, with no indicators that should have prompted additional investigation. The complaint was not upheld as the gambling problem was not visible to Finio at the time of lending.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement that lenders must complete reasonable and proportionate checks before lending. The assessment considered the loan amount, repayment size, duration, and Mr R's individual circumstances. The ombudsman found that Finio's verification of income via CATO was reasonable, the credit file showed Mr R was managing existing debts well with no adverse indicators, and the affordability assessment using a combination of provided figures, credit file data, and ONS estimates was proportionate. The use of an estimate for living expenses was reasonable and actually conservative as it was higher than Mr R's stated figure. The calculated disposable income of £1,840 was sufficient to cover the new loan payments. The ombudsman noted that Mr R's gambling problem was not visible to Finio and would not have been apparent from the available information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website