Upheld: Irresponsible lending complaint against East End Fair Finance Limited trading as Fair Finance
Financial Ombudsman decision DRN-6361415 of 2026-06-24T00:00:00+00:00. Irresponsible lending complaint against East End Fair Finance Limited trading as Fair Finance. Outcome: Upheld.
Decision detail
| Reference | DRN-6361415 |
|---|---|
| Decision date | 2026-06-24T00:00:00+00:00 |
| Firm | East End Fair Finance Limited trading as Fair Finance |
| Product | Personal loan |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Fair Finance must: (1) Remove all interest, fees and charges from the loan balance and treat any repayments made as repayments of principal; (2) If overpayments result, refund them with simple interest at Bank of England base rate plus one percentage point from date of overpayment to settlement; (3) Remove all negative information recorded on Mr S's credit file regarding this loan; (4) If capital balance remains outstanding, arrange an affordable and suitable payment plan with Mr S and remove negative credit file information once cleared. |
Summary
Mr S complained that Fair Finance irresponsibly lent him £500 in December 2025 when he was not in a position to repay. Fair Finance conducted checks including Open Banking data, credit searches, and income/expenditure verification, calculating Mr S had £105 monthly disposable income. However, the ombudsman found that while the checks were proportionate, Fair Finance failed to properly evaluate the information, which revealed Mr S's expenditure exceeded his income, he was reliant on borrowing, had recently taken payday loans, was at credit limits on multiple cards, and had experienced recent financial difficulties. Although the loan appeared affordable on a simple basis, it was unsustainable under regulatory definitions requiring repayment without undue difficulties and without further borrowing. The complaint was upheld and Fair Finance was directed to remove all interest and charges, refund any overpayments with interest, and remove negative credit file information.
The Ombudsman's reasoning
Although Fair Finance carried out reasonable and proportionate checks and gathered appropriate information, it failed to properly evaluate that information when deciding whether to lend. The checks revealed Mr S was already struggling financially: his expenditure exceeded his income, he was reliant on borrowing to make ends meet, he had recently taken payday loans, was at credit limits on multiple cards, and had experienced recent financial difficulties with returned Direct Debits on essential bills. While the loan appeared affordable on a simple pounds and pence basis (£105 monthly disposable income), the regulatory definition of sustainable requires repayments to be made without undue difficulties and without needing to borrow further. The evidence clearly indicated Mr S was unlikely to repay sustainably, which was borne out by his subsequent difficulties making repayments.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| East End Fair Finance Limited trading as Fair Finance, all decisions | 6 | 67% |
| Irresponsible lending, all decisions | 30,675 | 37% |
| Personal loan, all decisions | 23,643 | 29% |
Source
Read the original decision on the Financial Ombudsman Service website