Loans 2 Go Limited · DRN-6236498

The complaint Miss T has complained that Loans 2 Go Limited unfairly provided her with a consolidation loan. What happened In September 2024, Miss T entered into a finance agreement with Loans 2 Go for a loan as shown below. Date Amount of credit Term Monthly payment Total repayable 15 September 2024 £1,810 24 months £234.75 £5,850 In October 2024, Miss T complained to Loans 2 Go about the lending. In the complaint, Miss T said she didn’t think it had lent to her responsibly. She said had Loans 2 Go given proper consideration to her situation at the time it would have realised she had a poor credit history and that the loan was unaffordable for her. Miss T has also complained about the fairness of the interest rate applied to the loan and says this contributed to the lending being unaffordable. Loans 2 Go looked into Miss T’s complaint and issued a final response letter explaining it believed it had acted fairly when completing its checks. It said it had confirmed the agreement was affordable by gathering information from Miss T and checking the information the credit reference agencies held. Loans 2 Go has said based on the information it found, it believes its decision to lend was fair. It also said that Miss T had been required to read and sign the loan agreement before the lending was provided. So, it said she was aware of, and had accepted, how much she needed to pay and for how long. It also pointed out that Miss T had 14 days to change her mind about the loan and this had been made clear in the agreement. Miss T didn’t accept Loans 2 Go’s response, so she referred her complaint to our service. One of our investigators looked into it, and based on the evidence available, our investigator said he didn’t think Loans 2 Go’s decision to lend was unfair but awarded £250 compensation for how it had handled things. Miss T didn’t accept what our investigator said and asked for a final decision on the case. As no agreement could be reached, the complaint has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. I think there are key questions I need to consider in order to decide what is fair and reasonable in this case:

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• Did Loans 2 Go carry out reasonable and proportionate checks to satisfy itself that Miss T was able to sustainably repay the credit? • If not, what would reasonable and proportionate checks have shown at the time? • Did Loans 2 Go make a fair lending decision? • Did Loans 2 Go act unfairly or unreasonably towards Miss T in some other way? Loans 2 Go had to carry out reasonable and proportionate checks to satisfy itself that Miss T would be able to repay the credit sustainably. It needed to assess the likelihood of Miss T being able to repay the credit, as well as considering the impact of the repayments on her. There is no set list of checks that it had to do, but it could take into account several different things such as the amount borrowed, the length of the agreement, the amount of the monthly repayments, and the customer’s circumstances. Loans 2 Go says it asked Miss T about her income, and she declared a monthly income of £1,800. Loans 2 Go was able to successfully verify this through the credit reference agencies, and I don’t think it was unreasonable for it to rely on this information when considering affordability. Loans 2 Go says it used Miss T’s credit file to understand her repayments to other debts and to get an understanding of her situation before it decided to lend. It’s said it found no recent defaults, no bankruptcies, IVAs, or CCJ’s. However, whilst Miss T was up to date with most of her other credit, I can see that she was in an arrangement to pay with one of her creditors. Loans 2 Go has provided evidence of the calculations it did when considering whether Miss T could afford the loan. I can see it gathered information from Miss T and considered nationally recognised statistics. As the living costs Miss T declared were higher than those it estimated using the data from the Office for National Statistics, it used the figures she had provided to calculate affordability. In this calculation it included costs for rent, groceries, utilities, transport, credit commitments, a buffer for other regular expenses, and repayments to this loan. Based on the information Miss T provided and the income it verified, Loans 2 Go calculated that Miss T would be left with just over £400 a month in disposable income. This would be to cover other non-essential costs and any unexpected expenses, and I think it’s a reasonable amount. Given the adverse information Loans 2 Go found on Miss T’s credit report I think it was reasonable for it to ask her for details of her expenditure. And I think it was fair for it to rely on the information Miss T provided when assessing affordability. Although the investigator felt checks should have gone further, based on what I’ve seen, I’m persuaded the checks Loans 2 Go completed were reasonable and proportionate to the amount and type of credit it went on to approve. And I’m satisfied the decision to lend was reasonable based on the information Loans 2 Go obtained about Miss T’s circumstances. However, for completeness, I have thought about what Loans 2 Go is likely to have discovered, had it done further checks. I have reviewed the statements Miss T has provided. Having done so, it appears the figures used by Loans 2 Go for Miss T’s expenditure exceed those that can be evidenced by the statements provided, and her income is broadly the same as that declared and verified during the application. So, I haven’t seen anything to suggest that had Loans 2 Go gone even further in its checks it would have found anything that suggested the loan was unaffordable. Miss T has said that she took out the loan to pay a tenancy deposit and that she told Loans 2 Go this was the case. However, the records held by Loans 2 Go show it was told the reason for the loan was ‘personal loan’. I can also see that Miss T told Loans 2 Go that her

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rent payments would be £250, not the £1,250 she has since told this service they were. So, whilst I appreciate what Miss T has said, I’m not persuaded that Loans 2 Go ought to have known she would soon be spending significantly more on her housing costs. I’m also satisfied it was reasonable for it to rely on the information it was given during the application, including the sum declared for rent. I’m very sorry to disappoint Miss T but overall, I think the checks completed were proportionate and I’m not persuaded that Loans 2 Go created unfairness in its relationship with her as a result of its decision to lend. I can see that Miss T let Loans 2 Go know she was unhappy with the interest rate applied to the loan and thinks this would have impacted how sustainable the loan was. I can understand why Miss T has said this, but when thinking about sustainability for a loan a lender needs to be reasonably confident from its checks, that the customer will be able to maintain the monthly repayment for the term without undue hardship. In this case I think Loans 2 Go did this and made a fair decision to lend. It appears that Miss T’s circumstances changed shortly after taking out the loan, but I don’t think this was reasonably foreseeable by Loans 2 Go based on the evidence available to me. I can see that Loans 2 Go didn’t fully address Miss T’s concerns about the fairness of the interest applied to the loan, so the investigator asked it to pay £250 to recognise this. I think this is fair in the circumstances and would remind Loans 2 Go of its obligations to treat Miss T fairly in agreeing a suitable repayment plan for the loan should one be needed. I’ve also considered whether the relationship might have been unfair under s.140A of the Consumer Credit Act 1974. But overall, it’s not clear enough to me that Loans 2 Go created unfairness in its relationship with Miss T by lending to her irresponsibly, or in the way it handled the account under the credit agreement. And I haven’t seen anything to suggest that s.140A or anything else would, given the facts of this complaint, lead to a different outcome here. I’m very sorry to disappoint Miss T, but for the reasons set out, I don’t find that her relationship with Loans 2 Go was unfair, and I can’t conclude Loans 2 Go treated her unfairly in any other way based on what I’ve seen. My final decision My final decision is that I uphold the complaint in part and direct Loans 2 Go Limited to pay Miss T £250 compensation. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss T to accept or reject my decision before 23 April 2026. Charlotte Roberts Ombudsman

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