Not upheld: irresponsible lending and unaffordable credit complaint against Salad Finance Limited

Decision detail

Summary

Mr M complained that Salad Finance Limited irresponsibly lent him £500 in October 2025 without conducting sufficient affordability checks, citing his gambling addiction and financial vulnerability. Salad used Open Banking to verify Mr M's income at approximately £2,600 monthly and calculated disposable income of £1,236.80 after existing commitments and essential expenses, identifying only £206.59 in gambling spend over three months. The ombudsman found Salad's checks were reasonable and proportionate for the loan amount, with no adverse credit indicators or signs of financial difficulty, and that the more extensive gambling through intermediary processors was not evident at the point of application. The complaint was not upheld as Salad had no obligation to conduct further checks based on the information available to them at the time of lending.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate affordability checks. Given the loan amount of £500, Salad's use of Open Banking to verify income and assess disposable income of £1,236.80 was proportionate. The identified gambling of £206.59 fell within acceptable limits and did not trigger further investigation. The additional gambling through intermediary processors was not evident from the information Salad obtained at application, so there was nothing to put them on notice that further checks were required. The ombudsman noted that while Mr M's gambling addiction may have been exacerbated by the loan, it would be unreasonable to hold Salad solely responsible, and the regulator's rules only require proportionate checks based on the type and amount of credit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website