Not upheld: irresponsible lending - inadequate affordability checks complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Mr D complained that 118 118 Money lent to him irresponsibly on two occasions (June 2023 and June 2024) without adequate affordability checks. Mr D accepted the investigator's view on Loan 1, so the ombudsman focused on Loan 2 (£1,500 over 36 months). The ombudsman found that 118 118 Money used reasonable and proportionate checks including ONS dataset modelling for estimated outgoings and a credit file review showing no signs of distress, no delinquencies, and responsible debt management. All affordability calculations demonstrated disposable income exceeding £1,800 per month after the new lending, indicating sustainable repayments. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that 118 118 Money's use of ONS dataset modelling to estimate outgoings was reasonable and industry-standard practice given no additional expenditure was declared. The credit file was broadly positive with no signs of distress, no delinquencies, and evidence of responsible debt management including early repayment of previous loans. Crucially, all three independent affordability calculations demonstrated disposable income exceeding £1,800 per month after the new lending, indicating the repayments were sustainable. The fact that some previous loans were from non-prime lenders was not persuasive given they had been well-managed and paid off. The checks performed were proportionate to the amount of credit being offered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website