Upheld: irresponsible lending complaint against Fairscore Ltd trading as Updraft

Decision detail

Summary

Mr M complained that Updraft lent to him irresponsibly by providing a £7,200 personal loan in September 2025 requiring £167 monthly repayments. Mr M had very high existing unsecured debt (over £83,000, representing 160% of annual income), had recently taken out three other significant loans, had payment arrangement issues, and had a history of re-accumulating credit card debt after previous consolidation lending. The ombudsman found Updraft's checks were not proportionate to the high-risk circumstances and that proper investigation would have revealed Mr M's essential expenditure of £3,000 monthly against income of £3,134, leaving insufficient disposable income to afford the loan repayments. The complaint was upheld and Updraft was ordered to remove all interest and charges, arrange an affordable repayment plan, and remove adverse credit file information once repaid.

The Ombudsman's reasoning

The ombudsman found that Updraft failed to carry out proportionate checks given the high-risk nature of the application. With unsecured debts exceeding 160% of annual income, three recent significant loans, payment arrangement issues, and a pattern of re-accumulating debt after consolidation, Updraft should have conducted more detailed financial investigation. Had they done so, they would have discovered Mr M's essential expenditure of approximately £3,000 per month against income of £3,134, leaving insufficient disposable income (only £130) to afford the £167 monthly repayments. The ombudsman rejected reliance on the intended debt consolidation benefit because Mr M's previous behaviour demonstrated he was unlikely to successfully close credit card accounts after consolidation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website