Not upheld: irresponsible lending / proportionate affordability checks complaint against Creation Consumer Finance Limited

Decision detail

Summary

Mrs C complained that Creation acted irresponsibly by lending her £1,500 on a shopping account in November 2022, claiming the checks were inadequate and the lending was unaffordable. Mrs C stated she was reliant on benefits including PIP, not employed full-time as she believed the application showed, and had to rely on family borrowing to make payments. The ombudsman found that while Creation's checks were not reasonable and proportionate, reasonable checks would have shown Mrs C had approximately £330 in monthly disposable income after expenses, making the lending affordable. The complaint was not upheld as the lending decision was fair based on what proper checks would have revealed, and there was no prior evidence of vulnerability or financial difficulty that should have prompted additional safeguards.

The Ombudsman's reasoning

The ombudsman found that while Creation's checks were not reasonable and proportionate, the lending decision itself was fair. By reviewing Mrs C's bank statements, the ombudsman determined that reasonable and proportionate checks would have revealed Mrs C had approximately £330 in disposable income remaining after expenses and the new credit limit, making the lending affordable. The account came with interest-free and Buy Now Pay Later options providing flexibility. Mrs C did not contact Creation about financial difficulties prior to her complaint, and there was no evidence prior to May 2025 that would have indicated she had ADHD or mental health concerns requiring additional safeguards.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website