Upheld: irresponsible lending - inadequate affordability assessment complaint against West One Secured Loans Limited trading as West One
Financial Ombudsman decision DRN-6301934 of 2026-05-27T00:00:00+00:00. irresponsible lending - inadequate affordability assessment complaint against West One Secured Loans Limited trading as West One. Outcome: Upheld.
Decision detail
| Reference | DRN-6301934 |
|---|---|
| Decision date | 2026-05-27T00:00:00+00:00 |
| Firm | West One Secured Loans Limited trading as West One |
| Product | second charge mortgage |
| Claim type | irresponsible lending - inadequate affordability assessment |
| Outcome | Upheld |
| Remedy | West One must: (1) Remove all interest and lender-charged fees from the loan balance, leaving only the original capital borrowed (£35,482) plus the broker fee (£2,093), totalling £37,575; (2) Treat all payments made by Mr and Mrs W as capital repayments; (3) If the balance is cleared, refund any overpayments and pay 8% simple interest per annum from the date of overpayment until settlement; (4) If a balance remains, cease charging any interest on that balance, agree an affordable repayment plan with Mr and Mrs W, and retain the charge over the property until fully repaid; (5) Remove any adverse information related to this mortgage from Mr and Mrs W's credit file. |
Summary
Mr and Mrs W complained that West One granted them an unaffordable second charge mortgage for £35,482 in 2022 to consolidate unsecured debt. West One's affordability assessment recorded a post-stress surplus of only £29 per month, but the ombudsman found multiple deficiencies in the assessment. Mr W's self-employed income was calculated without accounting for his recent month of inability to work; child benefit income was improperly included despite being guaranteed to cease during the 25-year loan term; council tax expenditure was understated; and the stress test was not evidenced as reflecting market expectations. Critically, Mr and Mrs W had taken on over £14,000 in unsecured debt in less than a year, demonstrating lack of financial resilience. The ombudsman upheld the complaint and ordered West One to remove all interest and fees, leaving only capital plus broker fees, treat all payments as capital repayments, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that West One failed to conduct a fair and reasonable affordability assessment. Although West One recorded a small surplus of £29 after stress testing, this was insufficient given Mr and Mrs W's demonstrated lack of financial resilience. The ombudsman identified multiple deficiencies: Mr W's income calculation did not account for his recent month of inability to work; child benefit income was unreasonably included despite being guaranteed to cease during the loan term; council tax expenditure was understated by pro-rating over 12 months rather than reflecting actual 10-month payments; and the stress test calculation was unclear and not evidenced as reflecting market expectations. Most critically, Mr and Mrs W had taken on over £14,000 in unsecured debt in less than a year, demonstrating they lacked financial resilience to absorb unexpected costs. The ombudsman rejected West One's argument that the loan was affordable because it reduced monthly outgoings compared to the previous unsecured debt position, finding that position was itself unsustainable and Mr and Mrs W would have sought alternative solutions. The loss suffered is the ongoing interest on a loan that should never have been granted.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| West One Secured Loans Limited trading as West One, all decisions | 1 | 100% |
Source
Read the original decision on the Financial Ombudsman Service website