Not upheld: irresponsible lending complaint against Creation Consumer Finance Limited

Decision detail

Summary

Miss N complained that Creation acted irresponsibly when approving a £3,500 catalogue shopping account in June 2020, arguing that proportionate checks were not carried out and that she was in financial difficulty with high debt-to-income ratio and overdraft dependency. Creation maintained they completed sufficient checks and the lending was suitable and affordable. The ombudsman found that Creation's CRA checks were reasonable and proportionate, showing Miss N had adequate disposable income of £1,843.16 after existing commitments, and that her existing credit was well-managed with no recent arrears at the time of lending. The ombudsman rejected Miss N's arguments that bank statements should have been reviewed or that other lenders' upheld complaints were relevant, finding each case must be determined on its own merits. The complaint was not upheld.

The Ombudsman's reasoning

Creation carried out proportionate checks appropriate to the credit type and amount. The CRA data showed Miss N had disposable income of £1,843.16 after accounting for existing commitments and the new credit requirement, and that existing credit was well-managed with no recent arrears. The lending decision was fair based on the information available at the time. Creation was not required to obtain bank statements or investigate further, and even if actual income was lower than declared, the lending would still have been affordable. Miss N's later financial difficulties and vulnerability were not apparent to Creation prior to her complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website