Not upheld: irresponsible lending complaint against Oakbrook Finance Limited trading as Finio Loans

Decision detail

Summary

Ms T complained that Finio irresponsibly lent her £2,000 in August 2023, arguing they should have verified her income via bank statements and conducted further checks given her overdraft use and previous defaults. Finio verified her declared income of £45,996 using CATO and completed an affordability assessment showing sufficient disposable income for the £104.97 monthly repayment. The ombudsman found Finio's checks proportionate and the lending decision fair, noting that the loan represented only 4.3% of her declared income and total unsecured debt was 7.8% of income, and that an overdraft alone does not indicate unaffordability. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Finio's checks were proportionate given the circumstances. Although Ms T's actual bank statements showed lower income than declared, Finio was not required to request bank statements because Ms T had the opportunity to declare her actual income and Finio verified the declared income using CATO, an industry standard method. The affordability assessment, which included CRA data on actual credit commitments and modelled expenditure with a buffer, showed Ms T had sufficient disposable income. The presence of an overdraft and previous defaults did not automatically indicate the lending was unaffordable, particularly given the loan represented only 4.3% of her declared income and total unsecured debt was only 7.8% of income.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website