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

Decision detail

Summary

Mr C complained that Finio Loans lent irresponsibly when approving his £3,000 loan application in July 2023. Finio's affordability assessment used a CATO-derived minimum income figure of £1,205 per month, calculating only £51 disposable income. Mr C later revealed he had actually earned approximately £3,000 per month, had applied for multiple other loans simultaneously, and had been gambling heavily. The ombudsman found that while Finio should have verified actual income, doing so would have shown approximately £1,850 in monthly disposable income, sufficient to afford the £83.42 monthly repayment. The ombudsman also found that the other loan applications and gambling evidence were not visible to Finio at the time and therefore could not have triggered vulnerability concerns. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring proportionate affordability checks before credit approval. While Finio should have verified Mr C's actual income rather than relying on the CATO minimum income figure of £1,205, the ombudsman recalculated affordability using Mr C's actual income of £3,000 per month. This showed disposable income of approximately £1,850 per month after all deductions, which was sufficient to sustainably afford the £83.42 monthly loan repayment. The ombudsman found the application appeared positive with low unsecured debt, up-to-date mortgage, and no adverse credit. Regarding vulnerability, the ombudsman found no information available to Finio at the time of application that should have triggered concerns about gambling or vulnerability, as the other loan applications and gambling evidence were not visible to Finio and only emerged later.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website