Not upheld: irresponsible lending complaint against Fairscore Ltd trading as Updraft

Decision detail

Summary

Mr C complained that Updraft lent to him irresponsibly by providing two loans (£3,500 in January 2024 and £15,000 in September 2024) without adequate affordability checks. Updraft verified Mr C's income through open banking, obtained expenditure information adjusted by industry data, and checked his credit file. The ombudsman found the checks were proportionate and the results supported lending decisions, as Mr C had substantial income, reasonable monthly surplus after repayments, and a credible debt consolidation purpose evidenced by his subsequent repayment behaviour. Although Mr C's debt repayments represented 50% of income at the first application, this was mitigated by his large income level. By the second application, his income had increased 30% and credit utilisation had fallen from 85% to 13%, indicating improved financial position. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for reasonable and proportionate affordability assessments that are borrower-focused. The checks performed were proportionate given the circumstances. Although Mr C's debt repayments represented 50% of income at the first loan, his substantial income provided sufficient mitigation and left a reasonable monthly surplus. His stated debt consolidation purpose was supported by evidence of actual repayment behaviour. By the second loan, his income had increased 30% and credit utilisation had fallen significantly, indicating improved financial position. The previous ombudsman decision was distinguishable as Mr C's circumstances had materially improved in the intervening year.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website