Not upheld: irresponsible lending - IVA early settlement loan complaint against Asgard Financial Services Limited trading as Sprout Loans

Decision detail

Summary

Mr C complained that Sprout Loans irresponsibly lent him £14,150 in November 2021 to settle his IVA, arguing the loan was unaffordable given his bank statements showing gambling transactions, cryptocurrency purchases, low balances, and high-cost commitments. Sprout Loans had conducted income and expenditure assessments showing a monthly surplus of £686 after the £535 loan repayment. The ombudsman found Sprout Loans' checks were comprehensive and proportionate, their affordability calculations reasonable despite some figures being slightly conservative, and that gambling spending levels were not compulsive. The complaint was not upheld as the loan appeared affordable based on information available at approval, and the subsequent loan extension resulted from unforeseen family illness rather than foreseeable harm.

The Ombudsman's reasoning

The ombudsman found that Sprout Loans carried out comprehensive and proportionate checks given Mr C's circumstances as someone settling an IVA. Although some of Sprout Loans' expenditure figures were slightly low (particularly travel costs and vehicle maintenance), even with more appropriate figures included, Mr C would have retained approximately £275 per month disposable income after loan repayments, making the loan appear affordable. The ombudsman rejected Mr C's arguments about undisclosed essential costs for children and partner expenses, finding these were not communicated to Sprout Loans at the time. The gambling and cryptocurrency spending levels were not deemed compulsive. The loan extension was due to unforeseen family illness, not foreseeable harm caused by Sprout Loans.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website