Not upheld: irresponsible lending - insufficient affordability checks complaint against Lendable Ltd trading as Autolend

Decision detail

Summary

Miss H complained that Lendable lent irresponsibly by failing to make sufficient affordability checks before granting two loans (£6,000 in September 2022 and £1,000 in July 2023). The investigator upheld the complaint, finding disposable income was insufficient to sustain repayments. However, the ombudsman disagreed, finding that for loan one the checks were reasonable and proportionate, and for loan two although checks were not proportionate, Miss H's actual disposable income (based on current account analysis) was sufficient to sustain repayments. The ombudsman rejected the investigator's disposable income calculations and noted significant discretionary spending in Miss H's accounts. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that for loan one, Lendable's checks were reasonable and proportionate. The comprehensive credit file combined with open banking data gave Lendable a reasonable understanding of Miss H's financial situation. The purpose of consolidation was important and Lendable reasonably relied on Miss H's application in good faith, estimating significant monthly savings from consolidation. When disposable income was calculated allowing for consolidation savings and the new loan cost, sustainable repayments could be made. For loan two, although the checks were not proportionate (Lendable should have clarified whether the previous consolidation had been effective given increased indebtedness and late payments), the ombudsman's own analysis of current account records showed sufficient disposable income to sustain repayments. The ombudsman rejected the investigator's calculations of negative disposable income and found discretionary spending in the accounts considerably exceeded the repayment amounts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website