Upheld: irresponsible lending (original lender) and service failings in forbearance/complaint handling (debt servicer) complaint against Link Financial Outsourcing Limited trading as Asset Link Capital (No.9)

Decision detail

Summary

Miss C complained about three loans totalling £15,000 taken with Future Finance between July 2018 and March 2019 for tuition fees and living expenses while studying. The loans were transferred to Asset Link Capital (No.9) in November 2022 and serviced by Link Financial Outsourcing Limited. Miss C complained in October 2024 about irresponsible lending and poor forbearance support. The ombudsman upheld the complaint but found that the original lending decisions by Future Finance could not be reviewed as that lender no longer exists and LFO was not involved in those decisions. Service failings by LFO were identified but the ombudsman rejected Miss C's request for capital write-off, finding she had received the benefit of the funds through completing her education. The remedy ordered interest refunds totalling £3,779.68 and removal of adverse credit file information, but Miss C remains liable for the capital balance.

The Ombudsman's reasoning

The ombudsman found that while the complaint activities (irresponsible lending and forbearance) are regulated activities, the original lending decisions were made by Future Finance which no longer exists and is therefore outside FOS jurisdiction. Link Financial Outsourcing Limited only became involved as debt servicer from November 2022 and did not take responsibility for the original lending decisions. Therefore, the complaint about irresponsible lending cannot be upheld against LFO. However, service failings by LFO in handling Miss C's concerns since becoming servicer were identified, including failure to address all complaint points and lack of clarity regarding payment arrangements. The ombudsman rejected Miss C's request for capital write-off, finding that she received the benefit of the borrowed funds (completing her education) and should therefore repay the principal. The remedy of interest refunds and credit file removal was deemed appropriate and in excess of normal compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website