Not upheld: irresponsible lending - inadequate affordability checks complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Mr B complained that 118 118 Money lent to him irresponsibly by failing to conduct reasonable and proportionate affordability checks before approving a £3,000 loan in January 2026, despite Mr B being heavily indebted with approximately £29,600 existing credit and having received an upheld irresponsible lending complaint from the same lender one year prior. The ombudsman agreed the lender's checks were inadequate, as they failed to clarify the loan purpose, explore concerning credit file markers (multiple cash advances, eight new credit lines in six months, 75% minimum payments), or confirm actual outgoings. However, the ombudsman found that proper checks would have revealed approximately £600 monthly disposable income after the new repayment, suggesting sustainable repayments could have been made. Consequently, although the checking process was deficient, the lending decision itself was fair, and the complaint was not upheld.

The Ombudsman's reasoning

While 118 118 Money's affordability checks were not reasonable and proportionate—failing to clarify loan purpose, explore concerning credit file markers (multiple cash advances, eight new credit lines in six months, 75% minimum payments), or confirm actual outgoings—the ombudsman found that proper checks would have revealed approximately £600 monthly disposable income after the new loan repayment. This residual disposable income suggested sustainable repayments could have been made, making the lending decision fair despite the inadequate checking process.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website