Partially upheld: irresponsible lending - insufficient affordability checks complaint against Fairscore Ltd trading as Updraft
Financial Ombudsman decision DRN-6357325 of 2026-05-13T00:00:00+00:00. irresponsible lending - insufficient affordability checks complaint against Fairscore Ltd trading as Updraft. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6357325 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | Fairscore Ltd trading as Updraft |
| Product | consolidation loan |
| Claim type | irresponsible lending - insufficient affordability checks |
| Outcome | Partially upheld |
| Remedy | In relation to loan 3: Updraft must calculate total repayments made by Mr H and deduct from total amount received. If Mr H paid more than received, refund overpayments plus 8% interest from date of overpayment to settlement date, and remove all adverse information from credit file. If capital balance remains outstanding, arrange affordable payment plan with Mr H and remove adverse information once cleared. If debt sold to third party, Updraft must buy back debt or liaise with third party to ensure redress is carried out. Updraft must provide tax certificate if requested. |
Summary
Mr H complained that Updraft lent irresponsibly by providing three consolidation loans without sufficient affordability checks. The ombudsman found that loans 1 and 2 involved reasonable and proportionate checks including income verification, credit file review, and disposable income assessment, with loan 2 checks being adequate despite the recent prior consolidation loan because the credit file showed positive indicators and the recent external loan was not visible to Updraft. However, the ombudsman upheld the complaint regarding loan 3, finding that while the checks were reasonable and proportionate, the lending should not have been made given Mr H's rising unsecured debt and the pattern of three consolidation loans in a short timeframe. Updraft must refund any overpayments on loan 3 with interest and remove adverse credit file information.
The Ombudsman's reasoning
The ombudsman found that for loan 2, Updraft performed reasonable and proportionate checks including income verification via Open Banking and credit agency data, expenditure assessment using industry-standard data modelling, and review of credit file which showed positive indicators (no defaults, arrears, or recent significant borrowing). The ombudsman rejected the argument that a recent external loan should have triggered further enquiries, finding that Open Banking access had expired by loan 2 and the credit file did not reflect the most recent external lending. The ombudsman accepted that while a credit file may lack nuance, proportionate checks across the sector rely on credit files and it would not be proportionate to require detailed current account analysis. For loan 3, the ombudsman agreed with the investigator that despite reasonable checks, the lending should not have been made given Mr H's rising unsecured debt and this being the third consolidation loan in a short period.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairscore Ltd trading as Updraft, all decisions | 20 | 18% |
Source
Read the original decision on the Financial Ombudsman Service website