Partially upheld: Irresponsible lending complaint against Loans 2 Go Limited

Decision detail

Summary

Miss O complained that Loans 2 Go Limited lent to her irresponsibly when providing a £500 loan in August 2024 and that the interest rate was unfair. She argued that proper consideration of her circumstances would have revealed the loan was unaffordable and that her mental health vulnerabilities (diagnosed in 2018) should have been identified. Loans 2 Go verified Miss O's income at approximately £2,415 monthly and calculated she would have around £350 in monthly disposable income after expenses. The ombudsman found that Loans 2 Go completed proportionate checks and was not aware of Miss O's vulnerabilities at the time of lending, so the lending decision was fair. However, the complaint was partially upheld because Loans 2 Go failed to fully address Miss O's concerns about the interest rate, and the firm was ordered to pay £250 compensation.

The Ombudsman's reasoning

The ombudsman found that Loans 2 Go completed proportionate creditworthiness checks in accordance with CONC rules. The firm verified Miss O's income through credit reference agencies and used ONS data to calculate living expenses conservatively. The affordability calculation showed sufficient disposable income to cover the loan repayment. Although Miss O had mental health conditions diagnosed in 2018, Loans 2 Go was not aware of these at the time of lending and had no reasonable basis to identify her as vulnerable. The ombudsman could only assess fairness based on information available at the time of lending. However, the ombudsman upheld the complaint in part because Loans 2 Go failed to fully address Miss O's concerns about the fairness of the interest rate charged, warranting £250 compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website