Not upheld: refusal of settlement offer and forbearance in financial difficulty complaint against Fairscore Ltd (trading as Updraft)

Decision detail

Summary

Mr S complained that Updraft unfairly refused his offer of £5,000 in full and final settlement of three personal loans totalling over £17,300, and instead suggested he use his £40 monthly disposable income towards arrears. Mr S argued this breached FCA forbearance rules and left him with no emergency buffer. Updraft maintained their position was reasonable given the I&E showed disposable income and they later agreed to a reduced payment plan. The ombudsman found that Updraft's refusal was not unfair given the outstanding balance and disposable income shown, and that their suggestion to use the surplus towards arrears was reasonable in the context of discussing existing arrears. The ombudsman was satisfied Updraft exercised forbearance and treated Mr S fairly, and rejected Mr S's arguments regarding CONC rules, ultimately not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that Updraft's refusal to accept a substantially reduced settlement offer of £5,000 when over £17,300 was owed was not unfair, particularly given the income and expenditure check showed Mr S retained disposable income and loan repayments appeared affordable. While acknowledging Mr S's concern about having no emergency buffer, the ombudsman noted that in the context of discussing arrears (rather than initial lending) and given the I&E results, it was not unreasonable for Updraft to suggest using the £40 surplus towards arrears. The ombudsman was satisfied that Updraft exercised forbearance by working with Mr S and agreeing to a reduced payment arrangement. The ombudsman also rejected Mr S's arguments regarding CONC 7.14.1R (genuine dispute) and CONC 7.9.7R (oppressive conduct), finding neither applied to the circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website