Not upheld: irresponsible lending and unaffordable credit complaint against Fairscore Limited t/a Updraft

Decision detail

Summary

Mrs S complained that Updraft irresponsibly provided her with an £8,500 personal loan in August 2024 that was unaffordable, claiming their affordability checks were insufficient. She later entered a Debt Management Plan and raised concerns about her mental health and vulnerability. The FOS Investigator recommended upholding the complaint, but the ombudsman disagreed, finding that Updraft's checks—including Open Banking verification of income, income and expenditure assessment, and credit file review—were reasonable and proportionate. With net monthly disposable income of £805 against loan payments of £244.48 and no adverse credit markers, the ombudsman concluded the lending decision was fair and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate affordability checks. Updraft's checks, which included Open Banking verification, income and expenditure assessment using both declared and statistical data, and credit file review, were found to be reasonable and proportionate given the loan amount, type, and cost. Although Mrs S had significant existing debt (£84,000 unsecured), her credit history showed no adverse markers and she appeared to be managing credit well. Her net monthly disposable income of £805 was sufficient to cover the £244.48 monthly loan payment. The ombudsman found no indication that Updraft should have been aware of Mrs S's mental health vulnerability at the time of lending, and therefore the lending decision was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website