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

Decision detail

Summary

Mrs G complained that Lending Stream lent to her irresponsibly when it approved a £1,000 loan in February 2025 that was repayable over 12 months. She argued that Lending Stream failed to carry out appropriate checks and that the lending was unaffordable, particularly given the high cost of credit and insufficient disposable income. Lending Stream had calculated her monthly disposable income at approximately £200 after accounting for her declared income of £1,700, estimated living expenses of £1,008, existing credit commitments of £319.20, and the new loan repayment of £172.80. The ombudsman found that Lending Stream's checks were reasonable and proportionate for a first loan, that it was entitled to rely on statistical data for expenditure calculations, and that the disposable income provided sufficient headroom. Although Mrs G began experiencing repayment difficulties from May 2025 onwards, the ombudsman concluded that Lending Stream had not lent irresponsibly based on the information available to it at the time of lending.

The Ombudsman's reasoning

The ombudsman applied the regulatory framework under CONC 5.2A.19(G)(1) and found that Lending Stream's checks were proportionate given the circumstances: it was Mrs G's first loan, the loan size was not insignificant but the repayment amount of £172.80 was manageable, and there were no red flags in the credit search. The ombudsman accepted that Lending Stream could rely on statistical data for non-discretionary expenditure as there was nothing to suggest it was unrepresentative of Mrs G's situation. The calculated disposable income of £200 per month provided sufficient headroom for unexpected costs over the 12-month term. While the ombudsman acknowledged that a more granular assessment might have revealed Mrs G's true financial difficulties, the lender was entitled to rely on the proportionate information it had gathered, and the credit search showed no signs of overindebtedness or payment difficulties that would have prompted further investigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website