Steadypay Limited · DRN-6084263

The complaint Miss R complains that Steadypay Limited gave her a running credit facility which she couldn’t afford to repay. What happened In September 2024, Miss R was given a running credit account with a limit of £300 and she drew down on the facility 9 times. As of August 2025, an outstanding balance remains due but it’s possible that since then Miss R has repaid what she owed. Steadypay considered his complaint but didn’t uphold it. It argued it completed proportionate checks before lending and based on this; it was reasonable to agree the facility. Unhappy with this response, Miss R referred the complaint to the Financial Ombudsman. An Investigator considered the complaint and upheld it. They concluded from the Open Banking (OB) data that Steadypay had seen before it granted the facility that Miss R was a regular user of payday loans and so Steadypay ought to not have granted this facility. Miss R accepted the Investigator’s findings, but Steadypay didn’t agree and I’ve summarised the response below. • Steadypay carried out proportionate checks into Miss R’s income and credit history. • Miss R’s use of payday loans wasn’t caused by the actions of Steadypay. • Steadypay wasn’t expected to conduct a forensic review of the bank statements or override its decision to lend due to the actions of other lenders. • No harm has been caused to Miss R by taking out the facility – there are no arrears, missed payments or collection activity. • The remedy proposed is disproportionate as it would’ve allowed Miss R access to the service without paying for it. • The outcome contradicts the regulators guidance about how to do a risk-based affordability assessment. These points didn’t change the Investigator’s mind and so 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’ve read everything that the parties have said, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on a specific point, it’s not because I’ve failed to consider it, but because I don’t think I need to comment in order to reach a fair and reasonable outcome. And our rules allow me to do this. This reflects the nature of our service as a free and informal alternative to the courts. We’ve explained how we handle complaints about unaffordable and irresponsible lending on

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our website. I have used this approach to help me decide Miss R’s complaint. Steadypay needed to make sure it lent responsibly to Miss R. It therefore needed to complete sufficient checks to determine if Miss R could afford to sustainably repay the lending. Our website sets out our approach to what we typically think when deciding if a lender’s checks were proportionate. There is no set list of checks a lender should do, but there is guidance on the types of checks a lender could complete. However, these checks needed to be proportionate when considering things like the amount and term of the lending, what the lender already knew about the consumer, etc. It’s useful to set out how this product worked. The facility – called Cash Wave worked by giving Miss R a credit limit – in this case £300. She could withdraw on the facility, but the balance had to be repaid within 120 days. A representative example of the cost is provided in the credit agreement and so had Miss R borrowed £300 – repaid it over 120 days she would repay a total of £390. Which was the £300 capital borrowed and three months’ worth of monthly membership fees. The facility didn’t have any interest instead a monthly membership fee was paid £30 per month. Turning to the checks completed, Steadypay has said before agreed to advance the facility it performed an income and expenditure check – which was cross checked through an OB report. Steadypay also carried out a credit search. Having carried out these checks, Steadypay concluded “No flags were raised – your lending was within acceptable limits given your income…” Having considered the types of checks that Steadypay completed, I think these were proportionate when considering the credit limit given and the structure of how the account operated. The information gathered would have allowed Steadypay to gain a reasonable understanding of Miss R’s circumstances and whether she could have sustainably afforded to repay this lending. I’ll now go on to consider if, as a result of the information gathered, Steadypay made a fair lending decisions. After all it isn’t enough to just conduct proportionate checks, Steadypay also needed to consider the content of the information that it was provided with as part of the application. As part of this application – it did – through the OB report obtain what was in effect a ready only copy of Miss R’s bank account statements. Steadypay chose, as part of its affordability assessment to obtain a detailed understanding of Miss R’s actual monthly outgoings. While it says a forensic review wasn’t needed, it did have access to detailed financial information, and it did need to review this to see whether this facility was both affordable and sustainable for Miss R. From looking at the statements leading up to the September 2024 application, it’s clear that Miss R was already heavily overindebted and reliant on a number of existing high cost loan providers and other credit providers. For each month leading up to the facility being approved, Miss R was spending around 45% of her salary purely to repay existing high-cost creditors. As an example, I’ve looked at Miss R’s credit commitment repayments from when August 2024 – which is the last full month of OB report – in this month along she spent she spent almost £700 on such transactions. And in September 2024, for the part of the month we have the OB for she already spent a similar sum on such transactions.

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The OB report also showed that Miss R had been a regular user of these sorts of loans since at least April 2024. While I’ve noted what Steadypay says about the decision by the lenders to provide those loans it still nonetheless was aware of these loans been granted over an extended period of time. Of course on top of these transactions there are that other credit commitments to buy-now- pay later products, mail order account, mobile phone and other payments to other creditors – - which Steadypay knew about because it was told as part of the credit search results that Miss R had 22 active accounts and she had opened 11 new accounts int the preceding six months. Miss R was appears to have been heavily reliant on her overdraft at the time. It is clear from looking at the OB report that Miss R was over reliant on credit, particularly credit which was intended for short term use. And it’s clear that she was continuing to borrow to repay existing debts. Taking all this into consideration, I think Steadypay should have realised it wasn’t responsible to lend to Miss R at this time. Her OB report shows, in my view that she couldn’t afford to sustainably repay her existing credit commitments – without borrowing further, so she clearly didn’t have capacity to take on further debt. So, I don’t think Steadypay made a fair lending decision in relation to granting her the account in September 2024. I’ve also considered whether the relationship might have been unfair under Section.140A of the Consumer Credit Act 1974. However, I’m satisfied the redress I have directed below results in fair compensation for Miss R in the circumstances of her complaint. I’m satisfied, based on what I’ve seen, that no additional award would be appropriate in this case. Putting things right I’ve therefore set out below what Steadypay needs to do in order to put things right – which given the facility ought to not have been approved is a refund of any fees and charges levied on the capital that was lent. To be clear the capital amounts borrowed must be repaid but the loss to Miss R is any fees and charges added to that balance. There isn’t anything unusual about this compensation and is in line with the approach taken by the Financial Ombudsman for cases that are upheld due to unaffordable lending. In order to put things right for Miss R Steadypay should do the following; • Refund all monthly subscription fees Miss R paid for the facility along with 8% simple interest* per year calculated from the date each payment was made until the date of settlement. • If an outstanding capital balance still remains due, then Steadypay can use any of the above refund to offset this balance. It should then pay any surplus to Miss R. • If there would still be an outstanding balance, then if needed a mutually agreeable repayment plan should be put in place. But I would remind Steadypay of its obligation to treat Miss R fairly and with forbearance. • Remove any adverse information recorded on Miss R’s credit file in relation to the facility. *HM Revenue & Customs requires Steadypay to deduct tax from any award of interest. It must give Miss R a certificate showing how much tax it has taken off if she asks for one.

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My final decision For the reasons explained above, I uphold this complaint and I direct Steadypay Limited to put things right in the way I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss R to accept or reject my decision before 6 April 2026. Robert Walker Ombudsman

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