Not upheld: irresponsible lending complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Mr L complained that Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance irresponsibly provided him with a £5,000 loan in March 2023. The ombudsman reviewed Novuna's affordability checks, which showed Mr L had an annual income of £41,500, existing debt of £6,242 with monthly repayments of £194, and approximately £1,999 remaining monthly after housing and credit costs. Mr L's credit history showed historic defaults (most recent 33 months prior) but no recent arrears or concerning activity. The ombudsman concluded the checks were reasonable and proportionate, and there was nothing to suggest Mr L could not sustainably repay the loan. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman found that Novuna's pre-lending checks were reasonable and proportionate. The checks revealed Mr L had manageable debt levels relative to his income, with no recent arrears or concerning credit activity. After accounting for housing costs and existing credit repayments, Mr L had approximately £1,999 remaining monthly for other costs, suggesting he could sustainably repay the loan. The historic nature of the defaults (33 months prior) and absence of recent credit problems meant further investigation was not warranted. Based on the information available to Novuna, there was nothing to suggest Mr L would be unable to sustainably repay the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website