Not upheld: irresponsible lending complaint against Gain Credit LLC trading as Drafty

Decision detail

Summary

Mr M complained that Drafty lent irresponsibly by approving a £1,690 line of credit in April 2025. Drafty verified Mr M's income of £2,601 monthly and conducted a credit search showing total debt of approximately £32,400 with monthly credit commitments of £1,013, leaving approximately £819 in disposable income after all expenditure. The ombudsman found that Drafty's pre-lending checks were proportionate for a new customer and that post-approval monitoring was satisfactory, with the lender promptly suspending the account when Mr M missed a payment in October 2025. The complaint was not upheld as the lender was entitled to rely on the information provided and its research showing Mr M could afford the facility.

The Ombudsman's reasoning

The ombudsman applied the principle that lenders must take proportionate steps to understand whether consumers can repay sustainably. For a new customer applying for a £1,690 credit facility, a full comprehensive financial review was not proportionate. Drafty's checks were adequate: it verified income, conducted a credit search, and cross-referred declared expenditure. The resulting figures showed Mr M had over £800 monthly disposable income after all commitments, with no recent payment problems. The large debt volume was contextualised by the significant hire purchase component (typically for asset purchase) and the absence of indicators of difficulty with existing commitments. Historic adverse credit data was not concerning. Post-approval monitoring was satisfactory, with Drafty reviewing monthly credit reports and contacting Mr M six-monthly. When Mr M missed a payment in October 2025, Drafty promptly suspended the account. The lender was entitled to rely on the information provided and its research findings.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website