Upheld: Irresponsible lending complaint against Creation Consumer Finance Limited
Financial Ombudsman decision DRN-6462199 of 2026-06-30T00:00:00+00:00. Irresponsible lending complaint against Creation Consumer Finance Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6462199 |
|---|---|
| Decision date | 2026-06-30T00:00:00+00:00 |
| Firm | Creation Consumer Finance Limited |
| Product | Other regulated product |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | Creation Consumer Finance Limited should pay Mr T compensation of £826.44 (inclusive of the £100 already paid) for the misleading information provided about backdated interest charges. This amount can be paid directly to Mr T or used to reduce the loan amount. |
Summary
Mr T purchased a boiler for £3,401 with 12-month interest-free finance from Creation. When the interest-free period was about to expire in February 2025, Mr T called Creation to ask how interest would be charged going forward and was told it would not be backdated. Based on this misleading advice, Mr T decided to make only a partial payment rather than repay in full. Creation subsequently applied over £800 in backdated interest charges and initially offered only £100 compensation. The ombudsman found Creation's information was unclear and that Mr T would have repaid in full had he received proper advice. The ombudsman upheld the complaint and ordered Creation to pay £826.44 compensation (equal to the interest charged during the interest-free period) to restore Mr T to his original position.
The Ombudsman's reasoning
The ombudsman found that Creation's information given to Mr T was unclear and that Mr T made sub-optimal financial decisions as a result of misunderstandings about the backdated interest. The ombudsman was persuaded that Mr T would have chosen to repay the outstanding balance in full had he been properly aware of the consequences of not doing so. The aim of the service is to put a consumer back in the position they would have been had the mistake not happened. Therefore, compensation equal to the interest charged during the initial 12-month interest-free period (£826.44) is fair and reasonable. The ombudsman rejected Mr T's request for interest to be frozen during the complaint process, as this would extend the interest-free period to approximately 2.5 years, which would not be fair or reasonable.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Creation Consumer Finance Limited, all decisions | 1,246 | 60% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Other regulated product, all decisions | 51,462 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website