Partially upheld: Irresponsible lending complaint against Gain Credit LLC trading as Lending Stream

Decision detail

Summary

Miss E complained that Lending Stream irresponsibly lent her £250 (loan 1) and £1,240 (loan 2). Lending Stream settled loan 1 by agreeing to refund interest, fees and charges and remove adverse credit information. For loan 2, although Lending Stream knew Miss E had recent delinquencies, three accounts in arrears, and only £68 monthly disposable income after repayment, the ombudsman found that further checks should have been conducted but would have shown the loan was affordable based on her actual living costs. The complaint was partially upheld for loan 1 only.

The Ombudsman's reasoning

For loan 1, Lending Stream agreed it should not have been granted and made a settlement offer which is accepted. For loan 2, although Lending Stream should have conducted further checks given the recent delinquency, small disposable income (£68), and high monthly repayment (£208.66), a proportionate check into Miss E's regular living costs using bank statements would have shown the loan was affordable. The ombudsman distinguished between the obligation to conduct further checks (which was breached) and whether those checks would have led to a different lending decision (which they would not have). Lending Stream was entitled to rely on declared income verified by third-party tool and credit reference agency figures for existing commitments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website