PDL Finance Limited · DRN-6193526

The complaint Mrs R complains that PDL Finance Limited trading as Mr Lender lent to her when she could not afford it. What happened Mrs R took one loan from Mr Lender – it was for £500 in April 2025 and was scheduled to be repaid over twelve months, at variable amounts each month, the largest being £120.41 and the lowest £47. Mrs R told Mr Lender she was going to establish a Debt Management Plan and the loan was repaid early in August 2025. Mrs R has said that this was through her partner helping her out. After Mrs R had complained, received Mr Lender’s final response letter and had referred it to the Financial Ombudsman, one of our investigators looked at the complaint and did not consider that Mr Lender had done anything wrong. Mrs R disagreed and said ‘The issue is whether, at the point of lending, Mr Lender carried out a fair and proportionate assessment of my financial position using the information available to it. I do not believe that it did so. ‘ And ‘My concern is that the credit data available at the time already evidenced a very high level of existing indebtedness relative to my net monthly income.’ The unresolved complaint was 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. We’ve set out our general approach to complaints about this type of lending - including all the relevant rules, guidance, and good industry practice - on our website. Mr Lender had to assess the lending to check if Mrs R could afford to pay back the amount she’d borrowed without undue difficulty. It needed to do this in a way which was proportionate to the circumstances. Mr Lender’s checks could’ve taken into account several different things, such as how much was being lent, the size of the repayments, and Mrs R’s income and expenditure. I think in the early stages of a lending relationship, less thorough checks might have been proportionate. And as Mrs R took one loan that applies here. The higher level of checks we’d expect to see would often be where an individual may have had a low net income, or had taken multiple loans with Mr Lender, or had a poor credit history suggesting real financial difficulties. Mr Lender was required to establish whether Mrs R could sustainably repay the loan – not just whether she technically had enough money to make her repayments. Having enough money to make the repayments could of course be an indicator that Mrs R was able to repay her loans sustainably. But it doesn’t automatically follow that this is the case.

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Mrs R had told Mr Lender her income was £3,276 after tax each month. Mrs R is not satisfied that it knew enough about her finances. For example, she has referred to a mortgage. And although she has said it was in her name she has also told us that it cost around £2,000 a month and she shared that cost. But I’ve also used the financial information Mrs R has sent to us and her own credit reference agency report shows that she was linked as a ‘financial associate’ with another person for the provider of that mortgage. I consider it highly likely that Mr Lender would have seen this from its own research and as Mrs R can see from the table I’ve duplicated below, it halved the full mortgage cost of £2,020 to £1,010 to reflect that joint ownership. So, I do not accept Mrs R’s suggestion that Mr Lender did not know of these details surrounding her mortgage. And in any event, if it had asked her whether she paid for the mortgage with another her answer would have been ‘yes’. The table here shows what information Mr Lender had about Mrs R and seems to reflect that mortgage position and shared bills liability. Net income £3,276 Mortgage/rent £1,010 Electricity/gas/water £200 Food/travel £286 Telecommunications £50 Council Tax £100 Loans (inc short term) £1,400 Other regular outgoings £0 Total expenditure £3,046 Disposable income £230 Mr Lender has confirmed with us that it used a credit reference agency system to verify Mrs R’s income. So, it looked as though Mrs R was able to afford this loan considering her disposable income was £230. And the repayments for the Mr Lender loan were variable and decreasing – they were not scheduled to be £120 a month. Mr Lender carried out a credit reference agency check and that showed it Mrs R was not bankrupt, had not been in an IVA (Individual Voluntary Arrangement) for the previous three years and had no County Court Judgments registered in the previous three years. To satisfy myself, I used Mrs R’s credit reference agency report dated October 2025 and so the position showing in March/April 2025 was available for me to see. And I looked at the loans that were open and what Mrs R was due to pay and I got to similar figures to that calculated by Mr Lender. One of the loans was about to be paid off. Mr Lender was aware Mrs R had no outstanding ‘AAI’s which I know is an abbreviation for ‘Advance Against Income’, in other words a payday loan. And as I have said earlier, Mr Lender knew that Mrs R had a secured loan (such as a mortgage) and had unsecured loans as well. Mrs R has said in her complaint email to Mr Lender that she had a gambling problem. There’s no evidence to show that Mrs R told Mr Lender of this in April 2025 or that it was in receipt of any evidence to suggest Mrs R had a compulsive spending problem before it lent to her. Mr Lender knew that Mrs R had no issues with repayment of her recent or existing credit. And although Mrs R says that Mr Lender ought to have known more than it did, or ought to have found out more than Mrs R had told it, this is not what the regulatory framework expects of a lender, especially for a first and relatively modest loan application. I recognise that Mrs R told us about her gambling. But it would be disproportionate for Mr Lender to have discovered (for instance through bank account statements), at this stage of

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the lending relationship, that Mrs R was spending her money on gambling. And I say that because it had no reason to be prompted to carry out further checks which may have involved looking at bank statements. And I add that if any lender does need more information from an applicant, it can ask but bank statements are not prescribed. I am glad to see evidence that Mrs R has addressed this spending pattern issue and I hope that her support is continuing. I’ve also considered whether Mr Lender acted unfairly or unreasonably in any other way and whether the relationship might have been unfair under section 140A of the Consumer Credit Act 1974. However, for the reasons I’ve already given, I don’t think it lent irresponsibly to Mrs R or otherwise treated her unfairly in relation to this matter. I haven’t seen anything to suggest that Section 140A would, given the facts of this complaint, lead to a different outcome here I do not uphold the complaint. My final decision My final decision is I do not uphold the complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs R to accept or reject my decision before 23 April 2026. Rachael Williams Ombudsman

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