Partially upheld: irresponsible lending / unaffordable lending complaint against Gain Credit LLC trading as Lending Stream
Financial Ombudsman decision DRN-6324233 of 2026-05-07T00:00:00+00:00. irresponsible lending / unaffordable lending complaint against Gain Credit LLC trading as Lending Stream. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6324233 |
|---|---|
| Decision date | 2026-05-07T00:00:00+00:00 |
| Firm | Gain Credit LLC trading as Lending Stream |
| Product | payday loan |
| Claim type | irresponsible lending / unaffordable lending |
| Outcome | Partially upheld |
| Remedy | Lending Stream must: (A) refund all interest, fees and charges paid by Mr Q on loans 7 and 8; (B) pay 8% simple interest on individual repayments calculated from payment date to settlement date; (C) remove any adverse information recorded on Mr Q's credit file relating to loans 7 and 8; (D) provide a tax certificate if requested. |
Summary
Mr Q complained that Lending Stream lent him 8 payday loans between April 2023 and March 2025 without conducting sufficient affordability checks, despite evidence of overdraft dependency, repeat borrowing, and a cycle of debt. The Ombudsman upheld the complaint in part, finding loans 7 and 8 unaffordable (accepted by both parties), but not upholding complaints about loans 1-6. For loans 1-4, proportionate checks showed affordability. For loan 5, enhanced Open Banking checks verified income and expenses showing affordability despite rapid repeat borrowing. For loan 6, a 6-month break allowed Lending Stream to treat Mr Q as a new customer with proportionate first-loan checks. Lending Stream must refund interest, fees and charges on loans 7 and 8 with 8% interest and remove adverse credit file information for those loans only.
The Ombudsman's reasoning
The Ombudsman applied proportionality principles to affordability checks, recognizing that early loans in a relationship may require less thorough checks. However, certain factors trigger enhanced checks: low income, high repayments, multiple loans, and rapid repeat borrowing. For loans 1-4, the checks were proportionate and showed affordability. For loan 5, while the rapid repeat borrowing pattern warranted further checks, the Open Banking verification showed affordability based on verified income and expenses. For loan 6, the 6-month break constituted a new lending chain, allowing Lending Stream to treat Mr Q as a new customer with proportionate first-loan checks. For loans 7 and 8, both parties accepted these were unaffordable. The Ombudsman rejected the argument that entire loan entries should be deleted from the credit file, applying the standard approach of removing only adverse information, as the lending pattern (3 loans in the second chain) did not reach the threshold of being 'obviously harmful'.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Gain Credit LLC trading as Lending Stream, all decisions | 12 | 33% |
Source
Read the original decision on the Financial Ombudsman Service website