Not upheld: Irresponsible lending complaint against Gain Credit LLC trading as Drafty

Decision detail

Summary

Miss D complained that Drafty lent to her irresponsibly by failing to carry out sufficient affordability checks when she applied for a £3,000 fixed-sum loan in August 2025. Miss D claimed she was already experiencing financial difficulty with multiple existing financial commitments including overdrafts and other credit. Drafty verified Miss D's declared income of £1,900 through a credit reference agency, calculated her monthly outgoings at £897.08 (including £419.50 estimated expenses and £477.58 existing credit commitments), and determined she had monthly disposable income of £781.07 after the new loan repayment. The ombudsman found that Drafty's checks were proportionate and reasonable, that the loan was affordable on a sustainable basis, and that the absence of defaults or delinquencies on Miss D's credit file did not warrant further investigation. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS framework for irresponsible lending complaints, assessing whether Drafty carried out reasonable and proportionate checks and whether it lent responsibly based on the information gathered. The ombudsman found that Drafty's checks were proportionate given the loan size, Miss D's income level, and the loan term. Drafty reasonably verified Miss D's income through a credit reference agency and appropriately used statistical data for non-discretionary expenditure rather than relying on Miss D's implausibly low declaration of £25. The credit search revealed no defaults or delinquencies, suggesting Miss D was managing her existing commitments. Although Miss D had a reasonable level of existing debt (£11,845), the calculated monthly disposable income of £781.07 indicated the loan repayments were sustainable. The ombudsman acknowledged that Miss D's actual financial situation may have been worse than the information suggested, but found that Drafty was not unreasonable in relying on the information it had gathered through proportionate checks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website