Not upheld: irresponsible lending / inadequate affordability checks complaint against ONMO Limited

Decision detail

Summary

Miss G complained that ONMO failed to carry out reasonable and proportionate financial checks before approving a £550 credit card in July 2023, arguing that more thorough checks would have revealed her overdraft dependency, recent defaults, and gambling problem. ONMO defended its decision, stating it had conducted affordability checks using CRA data, open banking, and external credit sources, which showed no defaults within 6 months and sufficient disposable income of approximately £1,350 monthly. The ombudsman found the checks were reasonable and proportionate for the modest credit amount, that the default 8 months prior sat within ONMO's credit appetite as a 'low and grow' lender, and that Miss G's undisclosed vulnerabilities could not have been known to ONMO. The complaint was not upheld, with a recommendation that ONMO consider payment plans sympathetically if requested.

The Ombudsman's reasoning

The ombudsman found that ONMO, as a 'low and grow' digital lender, carried out reasonable and proportionate checks appropriate for the modest £550 credit limit. The checks verified income through industry-standard sources (open banking and CRAs) and demonstrated affordability with approximately £1,350 monthly disposable income. While a default existed 8 months prior, it sat within ONMO's credit appetite and did not warrant declining credit. The ombudsman rejected the argument that bank statements should have been obtained, as ONMO had already verified income through standard sources and would not be expected to conduct forensic analysis for such a low credit amount. Miss G's vulnerabilities and gambling problem were not disclosed and therefore could not have been known to ONMO.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website