Not upheld: Irresponsible lending complaint against Madison CF UK Limited trading as 118 118 Money

Decision detail

Summary

Miss M complained that 118 118 Money acted irresponsibly by approving a credit card account in April 2025 and increasing the credit limit twice (August 2025 and December 2025), arguing that the checks were not proportionate and that her reliance on benefits and limited disposable income should have been apparent from bank statements. Miss M also highlighted her history of a Debt Relief Order within six years and claimed she was vulnerable. The ombudsman found that 118 conducted proportionate checks at each stage, verified her income of £1,634 per month, calculated reasonable disposable income, and found her credit management was good at the time of each decision despite historic defaults. Although Miss M later experienced financial difficulties and missed payments in late 2025 and January 2026, the ombudsman found no evidence that 118 should have acted sooner, as Miss M had not disclosed her vulnerabilities or financial situation to 118 prior to her complaint. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for proportionate checks considering the type, amount, duration and total cost of credit, as well as the borrower's individual circumstances. For each lending decision (account opening and both credit limit increases), the ombudsman found that 118's checks were proportionate and the information obtained was considered fairly. The verified income of £1,634 per month, combined with calculated disposable income (£399.20-£169 depending on the stage), showed the lending was affordable. Although Miss M had historic negative credit information (defaults and discharged insolvency), the CRA data showed she was managing her credit well at the time of each decision with no recent delinquencies or defaults. The ombudsman noted that Miss M's indebtedness remained low to moderate compared to her declared income, and she was managing both internal and external credit well, often paying significantly more than minimum required amounts. The ombudsman found no evidence that 118 should have taken action prior to Miss M's complaint, as the account had been well-managed until late 2025, and Miss M had not disclosed her vulnerabilities or financial difficulties to 118 beforehand.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website