Not upheld: irresponsible lending and complaint handling during withdrawal period complaint against PDL Finance trading as Mr Lender

Decision detail

Summary

Miss S complained that PDL Finance irresponsibly lent her £500 in December 2025 and mishandled her withdrawal request. She argued the lender relied too heavily on generic affordability modelling and ONS data without considering her actual financial situation, including existing high-cost loans and credit reliance. She also complained about being warned of adverse credit reporting during her withdrawal period despite exercising her statutory right to cancel. The Ombudsman found PDL Finance's checks were proportionate given the loan size and term, the income verification through a credit reference agency was reasonable, and the firm appropriately collected a missed instalment and notified Miss S of the consequences, as it did not know she would settle early. The complaint was not upheld.

The Ombudsman's reasoning

The Ombudsman found that PDL Finance carried out proportionate checks given the size of the loan (£500), the short term (six months), and the modest monthly repayments relative to the declared income. The verification of income through a credit reference agency was reasonable and industry-standard. The use of ONS data for expenditure adjustments was appropriate as PDL Finance had no reason to suspect Miss S's non-discretionary expenditure was significantly higher than the statistical data. The credit search results did not indicate financial difficulty or credit reliance. While a more forensic analysis of bank statements might have revealed Miss S's actual financial difficulties, such detailed checks were not proportionate given the circumstances. Regarding the withdrawal request, PDL Finance was entitled to collect scheduled instalments during the withdrawal period and appropriately notified Miss S of the missed payment and potential credit implications, as it did not know at that stage whether Miss S would settle early.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website