Not upheld: irresponsible lending complaint against Brighter Lending Limited trading as Toot Loans

Decision detail

Summary

Mr W complained that Toot Loans irresponsibly provided him with a £2,000 loan in June 2024. Toot Loans failed to provide evidence of the checks it undertook before lending. The ombudsman assessed what proportionate checks would likely have identified using Mr W's bank statements and credit reports, which showed regular income of approximately £1,918, existing credit commitments of just over 50% of income, and approximately £190 disposable income after deducting expenses and the new loan repayment of £138.20. Although Mr W argued he was reliant on credit with high utilisation and limited disposable income, the ombudsman found the lending was not irresponsible given his regular income, limited adverse credit data, and general management of accounts. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that although Toot Loans failed to provide evidence of checks undertaken, insufficient checks alone are not enough to uphold a complaint. The ombudsman assessed what proportionate checks would likely have identified and concluded that based on Mr W's regular income of approximately £1,918, existing credit commitments of just over 50% of income, regular expenses of £550, and new loan repayments of £138.20, there would be approximately £190 disposable income remaining. While acknowledging this was not a large amount, the ombudsman found that given the limited adverse data on Mr W's credit file, his general management of accounts, and his regular income, the lending could not be considered unaffordable or irresponsible. The ombudsman also rejected arguments under section 140A of the Consumer Credit Act 1974.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website