Not upheld: irresponsible lending - inadequate affordability checks complaint against JAJA FINANCE LTD

Decision detail

Summary

Miss R complained that Jaja lent to her irresponsibly when providing a £1,600 credit card in May 2024, arguing that insufficient affordability checks were conducted. Jaja defended their decision, stating they had carried out proportionate checks that revealed no concerns. The ombudsman reviewed the evidence and found that Jaja's checks—including CRA data, income verification, and estimation of non-discretionary spending—were proportionate to the level of borrowing and suggested Miss R had approximately £1,300 in monthly disposable income. The ombudsman concluded that further checks would not have been proportionate and that Miss R's actual financial difficulties would not have been apparent from the information available at the time, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for proportionate affordability assessments and found that Jaja's checks were appropriate given the £1,600 credit limit. The CRA data showed no red flags, Miss R had a reasonable income relative to her existing commitments, and the calculated disposable income of approximately £1,300 monthly suggested affordability. The ombudsman concluded that further checks such as bank statements would not have been proportionate given the level of borrowing, and that Miss R's actual financial difficulties would not have been apparent from the proportionate checks Jaja conducted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website