Not upheld: irresponsible lending - affordability of loan repayments complaint against Creation Consumer Finance Limited

Decision detail

Summary

Mr G complained that Creation Consumer Finance Limited irresponsibly lent him £4,000 in February 2025 because the repayments were unaffordable. Creation had obtained information about Mr G's income and expenditure, cross-checked it against his bank account activity, and conducted a credit search showing low existing debts with no adverse data. The ombudsman found that Creation's checks were proportionate for an early-stage lending relationship and that the low monthly payment of £94.47 was affordable based on the information gathered. The complaint was not upheld as the ombudsman was satisfied Creation did not act unfairly or irresponsibly in providing the loan.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to irresponsible lending and concluded that Creation carried out proportionate checks appropriate for the early stage of a lending relationship. Given the low monthly payment amount (£94.47), the low existing debts shown in the credit search, and the information provided by Mr G about his income and expenditure, the ombudsman was satisfied the loan was affordable. Creation was not required to conduct a full review of Mr G's financial circumstances but only reasonable enquiries into whether he could make the monthly payments as stated in his application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website