Not upheld: Irresponsible lending complaint against Fairscore Ltd trading as Updraft

Decision detail

Summary

Miss D complained that Updraft lent to her irresponsibly by failing to conduct proper affordability checks before approving two loans (£12,000 in January 2024 and £2,100 in August 2024). She argued that adequate checks would have revealed she had reached credit limits with other providers and had multiple lines of open credit. Updraft upheld the complaint regarding the second loan but maintained the first loan was properly assessed. The ombudsman found that Updraft's checks for the first loan were reasonable and proportionate, with verified income, credit file data showing no defaults or missed payments, and sufficient disposable income to support sustainable repayment, particularly given the consolidation purpose would reduce monthly outgoings. The ombudsman did not uphold the complaint and agreed the remedy offered for the second loan was fair and reasonable.

The Ombudsman's reasoning

The ombudsman found that Updraft's checks were reasonable and proportionate given the nature of the lending (consolidation). Although Miss D had multiple credit lines with some near limits, the credit file showed no missed payments, arrears, or defaults, and all accounts were up to date. The ombudsman rejected the argument that a clean credit file masked underlying financial distress, finding nothing in the file to prompt further investigation. The ombudsman verified Updraft's income and expenditure calculations and found disposable income of approximately £230 per month before consolidation savings, with the consolidation itself reducing monthly outgoings by around £250. The ombudsman concluded the lending decision was fair and that Updraft did not lend irresponsibly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website