Not upheld: unfair charges and fee structure on fixed sum loan agreement complaint against Inclusive Finance Limited trading as Creditspring

Decision detail

Summary

Mr M complained that Creditspring unfairly charged him a £28 monthly membership fee after he repaid a loan advance early and charged him fees under two agreements simultaneously. Creditspring operates a fixed fee membership model where the £28 monthly fee represents the total cost of credit with 0% interest, resulting in a 64.5% APR. The fee is not discounted for early repayment and each agreement is independent. The ombudsman found the fee structure was clearly stated in the agreement and marketing material, and Creditspring fairly applied the terms by requiring the full fee under each agreement regardless of early repayment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the monthly fee of £28 represents the cost of credit and is clearly disclosed in both the agreement and marketing material. The fee structure is transparent and applies to each independent agreement regardless of early repayment. The Consumer Credit (Early Settlement) Regulations 2004 do not apply because this is a fee-based agreement, not an interest-based one. Marketing material explicitly states there is a limit of one membership per person with 12 monthly instalments, meaning when Mr M took out a new agreement, he was required to pay outstanding fees under the original agreement. The ombudsman concluded that Creditspring acted fairly and reasonably in applying the terms as stated.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website