Not upheld: irresponsible lending complaint against Plata Finance Limited

Decision detail

Summary

Miss M complained that Plata Finance Limited irresponsibly provided her with a £20,000 loan in 2024 requiring monthly repayments of £490.73 over five years. Plata verified Miss M's declared net monthly income of £4,746 through a credit reference agency and found she had existing unsecured debt of approximately £62,000 with a mortgage, all well managed with no defaults. After calculating debt servicing costs of around £3,000 per month and essential living costs of £600 per month, Plata determined Miss M had sufficient disposable income remaining. The ombudsman upheld Plata's lending decision, finding the pre-lending checks were reasonable and proportionate, and rejected Miss M's complaint.

The Ombudsman's reasoning

The ombudsman found that Plata's pre-lending checks were reasonable and proportionate. Based on the verified income of £4,746 per month, existing debt servicing costs of approximately £3,000 per month, and estimated essential living costs of £600 per month, there was sufficient disposable income remaining after the new loan repayments of £490.73 per month. The ombudsman did not consider it necessary for Plata to review bank statements given what the credit checks showed. No evidence suggested Miss M was likely to be unable to sustainably repay the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website