Upheld: irresponsible lending - unaffordable loan complaint against Fairscore Ltd trading as Updraft
Financial Ombudsman decision DRN-6340818 of 2026-06-09T00:00:00+00:00. irresponsible lending - unaffordable loan complaint against Fairscore Ltd trading as Updraft. Outcome: Upheld.
Decision detail
| Reference | DRN-6340818 |
|---|---|
| Decision date | 2026-06-09T00:00:00+00:00 |
| Firm | Fairscore Ltd trading as Updraft |
| Product | Personal loan |
| Claim type | irresponsible lending - unaffordable loan |
| Outcome | Upheld |
| Remedy | Updraft must rework the account removing all interest, fees, charges and insurances, and refund any credit balance with 8% simple interest per annum from the date of each overpayment. If an outstanding balance remains, Updraft must arrange an affordable repayment plan. In either case, all adverse information regarding the account must be removed from Miss M's credit file. |
Summary
Miss M complained that Updraft provided her with an unaffordable £2,000 loan in January 2022 for debt consolidation purposes when she was already struggling financially and regularly using her overdraft. Updraft's affordability assessment showed Miss M was spending around £638 monthly (43% of income) on existing debt repayments, leaving only £60 monthly after the new loan repayment. The ombudsman found that Updraft failed to properly investigate the debt consolidation purpose and that the loan would only settle a small percentage of Miss M's total debt, meaning she would retain access to the same credit limits. The ombudsman upheld the complaint, finding the loan was irresponsible and unsustainable, and directed Updraft to remove all interest, fees and charges, refund any overpayments with interest, and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that Updraft failed to properly investigate whether the debt consolidation would actually reduce Miss M's outgoings. Despite Miss M stating an intent to consolidate multiple credit commitments, the loan amount would only settle a small percentage of her debt, meaning she would retain access to the same credit limits. With Miss M already spending 43% of her monthly income on debt repayments and only £60 remaining monthly after the new loan repayment, the ombudsman concluded this was unsustainable over 36 months. The ombudsman rejected Updraft's argument that their affordability model erred on the side of caution, noting that relying on accurate credit reference agency data cannot be described as cautious, and the modest inflation of living costs did not overcome the fundamental affordability concerns.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairscore Ltd trading as Updraft, all decisions | 20 | 18% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website