Not upheld: irresponsible lending / failure to consider vulnerability complaint against IWOCA Ltd

Decision detail

Summary

T, a limited company with sole director Mr C, complained that Iwoca lent unfairly by approving further business lending without properly considering Mr C's disclosed mental health difficulties. In September 2024, Mr C emailed Iwoca about mental health issues while the account was in arrears. Iwoca responded appropriately by asking for explicit consent to record the information, which Mr C did not provide. Subsequently, T cleared its arrears, repaid its balance in full by mid-October, and Mr C managed the account coherently without raising mental health concerns again. When T applied for further funding in November 2024, Iwoca approved it based on the company's recent repayment history and financial position. The ombudsman found Iwoca acted reasonably throughout, as Mr C's subsequent conduct provided no indication his mental health was affecting his ability to manage the business, and no compensation was awarded.

The Ombudsman's reasoning

The ombudsman found that Iwoca's initial response to Mr C's mental health disclosure was fair and reasonable, as it would have been inappropriate to assume consent without explicit confirmation, particularly given the borrowing was in the company's name. The ombudsman determined that Mr C's failure to respond to Iwoca's request for confirmation meant Iwoca was entitled to proceed without recording the information. Critically, Mr C's subsequent conduct—coherent correspondence, successful repayment of arrears, and professional management of the account—provided no indication that his mental health was affecting his ability to manage the business. Therefore, when assessing the November 2024 lending application based on T's repayment history and financial position, Iwoca acted reasonably in approving the facility.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website