Partially upheld: irresponsible lending - inadequate affordability checks complaint against Gain Credit LLC trading as Lending Stream

Decision detail

Summary

Mr W complained that Lending Stream lent to him irresponsibly without adequate affordability checks. Between March and June 2025, he took 5 payday loans ranging from £150 to £750. The Investigator upheld the complaint for loans 4 and 5 only, finding that overlapping loans and deteriorating finances should have triggered more thorough checks. The Ombudsman agreed, finding that while the individual loan amounts were small, the broader pattern—including 7 new credit accounts in 3 months, credit commitments rising from £100 to £600 monthly, and multiple outstanding payday loans—required proportionate further investigation. Bank statements showed Mr W was overdrawn and using borrowed funds to pay credit cards. The complaint was partially upheld for loans 4 and 5, with Lending Stream ordered to refund interest, fees and charges plus 8% interest, and remove adverse credit file information.

The Ombudsman's reasoning

While loans 4 and 5 were individually small (£150 each), the context of the overall lending pattern required more thorough checks. The credit search results showed Mr W had opened 7 new credit accounts in 3 months and his credit commitments had increased dramatically from £100 to £600 per month. Combined with overlapping loans and the fact that only 2 of the previous 3 loans had been repaid, these were clear signs that further investigation was needed. The bank statements revealed Mr W had at least 4 outstanding loans, was overdrawn, and was using borrowed funds to pay credit cards—indicating unsustainable borrowing. Proportionate checks would have revealed this pattern and led Lending Stream to decline the loans.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website