Not upheld: irresponsible lending / unaffordable lending complaint against Oakbrook Finance Limited (trading as Finio Loans)

Decision detail

Summary

Mr S complained that Finio Loans irresponsibly lent him £1,500 in a 24-month loan with monthly repayments of £105.53, claiming the loan was unaffordable. Finio Loans conducted credit searches showing no recent CCJs and low active debt, and obtained Mr S's income and expenditure information before approving the loan. The ombudsman found the checks were proportionate for an early lending relationship and the loan amount was modest, with no indicators of financial difficulty. The ombudsman rejected Mr S's argument that the firm should have discovered undisclosed debts, finding the firm was entitled to rely on credit search results. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to irresponsible lending, determining that proportionate checks were required based on the early stage of the lending relationship and the modest loan amount. Finio Loans conducted credit searches and obtained income/expenditure information, which did not indicate financial difficulty or unaffordability. The ombudsman found that the £1,500 loan with £105 monthly repayments was not a large amount and the checks did not suggest Mr S would struggle. The ombudsman rejected Mr S's argument that Finio Loans should have discovered undisclosed debts, stating the firm was entitled to rely on credit search results. Even if further checks had been conducted, there was no evidence they would have led to a different lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website