Not upheld: irresponsible lending - failure to assess affordability complaint against Hastings Financial Services Limited trading as Hastings Direct

Decision detail

Summary

Mr C complained that Hastings Direct lent irresponsibly by failing to assess affordability when granting him a £7,500 loan in July 2023. Mr C argued that reasonable checks would have revealed he had recently taken four other loans and was increasingly reliant on debt to fund a gambling addiction. However, the ombudsman found that the four recent loans were not visible on Mr C's credit file at the time of lending, the credit file showed no signs of financial distress, and Hastings Direct's use of verified income and ONS datasets to calculate disposable income of £1,880 per month was reasonable and proportionate. The ombudsman declined to consider Mr C's bank statements retrospectively as there was no reason to request them at the time of lending, and Mr C's gambling addiction was neither disclosed nor apparent from the credit file. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the checks performed by Hastings Direct were reasonable and proportionate for a £7,500 home improvement loan. The credit file was positive with no signs of financial distress, and the four recent loans Mr C mentioned were not visible on the credit file at the time of lending, so Hastings Direct could not have been expected to see them. Using verified income and ONS datasets to estimate expenditure, Hastings Direct calculated sufficient disposable income (£1,880 per month) to support sustainable repayment. While the ombudsman had sympathy for Mr C's gambling addiction, this was not disclosed and was not visible in the credit file, so there was no reason to request bank statements or conduct enhanced checks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website