Not upheld: irresponsible lending complaint against Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance

Decision detail

Summary

Ms H complained that Mitsubishi HC Capital UK PLC trading as Novuna Personal Finance irresponsibly provided her with a £10,000 loan in January 2025. Ms H had existing debt of £53,500 and was spending 55% of her monthly income on credit commitments. The ombudsman found that while Novuna's initial checks were not fully proportionate, more thorough checks would not have shown the lending to be unfair, as Ms H had sufficient disposable income and the loan was intended for debt consolidation. The complaint was not upheld as Ms H's vulnerabilities were not disclosed to Novuna at the time of lending.

The Ombudsman's reasoning

The ombudsman found that while Novuna's initial checks were not fully proportionate given the high debt level and debt-to-income ratio, if proportionate checks had been conducted using Ms H's bank statements, they would not have shown the lending was unfair. Ms H had approximately £475 monthly disposable income after committed expenses and existing credit costs, and as the loan was for debt consolidation, it should not have increased overall credit costs. The ombudsman noted that Ms H's vulnerabilities were not disclosed to Novuna at the time of lending, so Novuna could not have been aware of them. There was nothing in the information available to Novuna at the time to suggest Ms H would be unable to sustainably repay the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website