Not upheld: Irresponsible lending complaint against Jaja Finance Ltd trading as Asda Money

Decision detail

Summary

Miss P complained that Asda Money failed to carry out thorough enough credit checks before approving a £1,600 credit card in February 2025, when she was actually unemployed and living on benefits, despite stating she earned £33,000 in her application. Miss P had existing debt she could not afford and requested the debt be written off or the credit limit acknowledged as too high with an affordable payment plan. Asda Money defended its decision, stating it carried out thorough checks using CRA data and affordability modelling which showed the credit was affordable. The ombudsman did not uphold the complaint, finding that the checks were proportionate to the level of borrowing, the declared income aligned with CRA data, and affordability modelling showed adequate disposable income after essential expenses and the new credit cost.

The Ombudsman's reasoning

The ombudsman found that while there are no set list of checks lenders must carry out, they should be borrower-focused and proportionate to the amount and type of borrowing. Asda Money gathered information from recognised external sources (CRAs and ONS) alongside Miss P's application information. The declared income aligned with CRA data, so further verification was not warranted. Given the modest level of existing credit (£1,100), no obvious credit issues, and affordability modelling showing adequate disposable income after essential expenses and the new credit cost, the checks were proportionate to the level of borrowing. The ombudsman noted that for a relatively low-value credit card facility, the same depth of due diligence would not be expected as for a large, long-term loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website