Upheld: irresponsible lending - unaffordable and unsustainable secured loan complaint against TANDEM HOME LOANS LIMITED trading as 1st Stop
Financial Ombudsman decision DRN-6359181 of 2026-05-14T00:00:00+00:00. irresponsible lending - unaffordable and unsustainable secured loan complaint against TANDEM HOME LOANS LIMITED trading as 1st Stop. Outcome: Upheld.
Decision detail
| Reference | DRN-6359181 |
|---|---|
| Decision date | 2026-05-14T00:00:00+00:00 |
| Firm | TANDEM HOME LOANS LIMITED trading as 1st Stop |
| Product | secured loan (mortgage) |
| Claim type | irresponsible lending - unaffordable and unsustainable secured loan |
| Outcome | Upheld |
| Remedy | Tandem must: (1) Calculate and refund all interest and charges applied to the loan (including lending and broker fees), plus 8% simple annual interest on that amount from the date the loan was redeemed to the date of settlement; (2) Remove any adverse information about the loan from Mr W's credit file. Tandem may deduct income tax from the 8% interest element but must inform Mr W of the deduction so he can reclaim from HMRC if entitled. |
Summary
Mr W complained that Tandem lent to him irresponsibly when providing a £25,000 secured loan in May 2019. Tandem's affordability assessment calculated disposable income of £184.55 monthly, but bank statement evidence showed actual expenditure significantly exceeded estimates, particularly for petrol (£200 versus £90-£100 estimated) and gambling transactions (£200, representing 11% of income). Mr W had also accumulated approximately £100,000 in new debt within 12 months and had missed recent payments on other products. The ombudsman upheld the complaint, finding the loan was unaffordable and unsustainable, and ordered Tandem to refund all interest and charges plus 8% simple annual interest, and remove adverse credit file information.
The Ombudsman's reasoning
Tandem failed to conduct a responsible lending assessment. Although Tandem's calculated disposable income appeared to show affordability, the actual bank statement evidence available at the time showed significantly higher expenditure than estimated, particularly for petrol (approximately £200 versus £90-£100 estimated). The gambling transactions alone (£200, representing 11% of income) would eliminate any disposable income. The rapid accumulation of approximately £100,000 in new debt within 12 months, combined with recent missed payments, indicated unsustainable borrowing patterns that Tandem should have investigated further. The affordability assessment left Mr W with no financial resilience, and the evidence of subsequent short-term borrowing, family loans, and eventual home sale demonstrates the loan was indeed unaffordable and unsustainable. Tandem should have either requested longer bank statement periods or made further enquiries given the discrepancies between estimated and actual expenditure.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| TANDEM HOME LOANS LIMITED trading as 1st Stop, all decisions | 1 | 100% |
Source
Read the original decision on the Financial Ombudsman Service website