Not upheld: irresponsible lending and unfair treatment after approval complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Mr I complained that Madison lent to him irresponsibly by approving a £5,000 loan in May 2025 which he could not afford, and that Madison treated him unfairly when he experienced repayment difficulties. Mr I argued Madison should have discovered his impending retirement and actual household outgoings. The ombudsman found that Madison carried out proportionate checks appropriate to the circumstances, including income verification and credit assessment, and that Mr I's good credit history and low debt levels did not trigger a need for more extensive investigation. The ombudsman also found Madison treated Mr I fairly after difficulties arose by offering forbearance and flexible payment arrangements. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the proportionality test for responsible lending, considering that Madison's checks should be proportionate to the circumstances. Given Mr I's good credit history, low overall debt, verified income of £1,193/month, and Madison's use of industry-standard tools to verify income and model reasonable household outgoings, the ombudsman found the checks were proportionate and fair. The ombudsman rejected the argument that Madison should have discovered Mr I's impending retirement or actual outgoings, as the regulatory framework does not require lenders to investigate beyond what borrowers disclose and what standard checks reveal. The ombudsman also found Madison treated Mr I fairly after difficulties arose by offering immediate forbearance, a breathing space, and flexible payment arrangements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website