Not upheld: irresponsible lending - inadequate affordability checks complaint against PDL Finance trading as Mr Lender

Decision detail

Summary

Mr C complained that PDL Finance irresponsibly lent him £500 in December 2025 by failing to conduct adequate affordability checks. Mr C later revealed he had 11 other loans and 5 credit cards, with borrowing linked to a gambling addiction. PDL Finance had verified his declared income of £3,265 monthly through a credit reference agency, estimated his disposable income at £1,447 after expenditure, and obtained credit search results showing no concerning indicators. The ombudsman found the checks were proportionate to a £500 first-time loan with 12-month repayment term and £133.91 maximum monthly payments, and that more forensic investigation would not have been reasonable in these circumstances. The complaint was not upheld.

The Ombudsman's reasoning

PDL Finance conducted proportionate checks appropriate to the circumstances: a £500 loan, the first with the lender, with monthly repayments of £133.91 maximum against declared disposable income of £1,447. The firm reasonably verified income through a credit reference agency, used ONS data for expenditure, and obtained credit search results showing no concerning indicators. While Mr C's actual financial situation was worse than the information suggested, more forensic checks would not have been proportionate given the loan size and term. The firm could not reasonably have known about the gambling addiction or full extent of other borrowing without conducting checks beyond what was proportionate in these specific circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website