Not upheld: irresponsible lending - affordability complaint against Madison CF UK Limited (trading as 118 118 Money)

Decision detail

Summary

Mr G complained that 118 118 Money lent him £4,000 irresponsibly in December 2022, arguing the monthly payments of £131.01 were unaffordable given his existing debts. 118 118 Money had obtained Mr G's declared income (validated against credit reference agencies), expenditure information, and conducted a credit search showing only minor adverse information with no significant defaults or judgments. The ombudsman found the lender's checks were reasonable and proportionate for a first loan, the unsecured debt was not excessive relative to validated income, and nothing indicated unaffordability, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the proportionality test for lending checks, noting this was the first loan in the relationship so less thorough checks were reasonable. The credit search showed no significant adverse information, Mr G's unsecured debt was not excessive relative to his validated income, and the monthly payment amount was relatively low. Nothing in the information gathered indicated the loan was unaffordable or gave obvious reason not to lend. The ombudsman concluded proportionate checks would not have required Mr G to evidence his expenditure in detail.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website