Plata · DRN-6195712

The complaint Mr T complains that Plata lent to him irresponsibly. What happened In July 2025, Mr T applied for a loan with Plata. His application was approved and he was provided with £9,000 at 29.7%, repayable over 36 months at £364.01 per month. In January of 2026, Mr T complained to Plata that at the time of the application, he was in a debt spiral, and it had “failed to conduct a proportionate check, as it ignored clear signs of financial distress and non-discretionary housing costs”. Plata responded to the complaint, rejecting it, and concluding that it made a fair lending decision. As a result, Mr T referred his complaint to our service and an Investigator here found that Plata had conducted reasonable and proportionate checks and the decision to lend was fair. Mr T rejected the Investigator’s view and maintained his stance that Plata made multiple mistakes when assessing his affordability. He also cited issues with the Investigators view, including failure to account for the joint account reality (where housing costs are paid), and the consistent use of his £250 overdraft leading up to the lend. Because an agreement couldn’t 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. The rules and regulations in place at the time Plata provided Mr T with the account required them to carry out a reasonable and proportionate assessment of whether he could afford to repay what he owed in a sustainable manner. This is sometimes referred to as an ‘affordability assessment’ or ‘affordability check’. The checks had to be ‘borrower’ focused. This means Plata had to think about whether repaying the credit sustainably would cause difficulties or adverse consequences for Mr T. In other words, it wasn’t enough for Plata to consider the likelihood of them getting the funds back or whether Mr T’s circumstances met their lending criteria – it had to consider if Mr T could sustainably repay the lending being provided to him. Checks also had to be ‘proportionate’ to the specific circumstances of the lending. In general, what constitutes a proportionate affordability check will be dependent on a number of factors including – but not limited to – the particular circumstances of the consumer (e.g. their financial history, current situation and outlook, any indications of vulnerability or financial difficulty) and the amount/type/cost of credit they were seeking.

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I’ve kept all of this in mind when thinking about whether Plata did what was needed before lending to Mr T. At account opening, Plata relied on both information provided by Mr T in the application and data it received from the CRAs (Credit Reference Agencies). Plata also discussed Mr T’s circumstances with him over the phone, pulled data via Open Banking, and obtained his most recent payslips. While on the phone, Plata confirmed some of the information on Mr T’s application. Mr T had declared in his application that he was single, with no dependants, and nothing to pay towards housing. He was questioned about his marital status because his Open Banking data had returned a joint account, so he verbally corrected the declaration from ‘single’ to ‘married’. He also verbally confirmed that he had no dependants and his wife paid the mortgage. Mr T declared his monthly salary as £2,093. Plata obtained the previous six-months of Open Banking data for Mr T’s primary account (a joint account shared with his wife). It also obtained two recent payslips. On average, Mr T’s monthly income over the previous six- month period was higher than he had declared, so I’m comfortable that Plata could reasonably accept the salary declared by Mr T to conduct their affordability assessment. Plata continued its creditworthiness assessment by reviewing Mr T’s CRA data. It says the review showed a positive outlook and good credit profiles going back several years – and significantly, no CCJs or defaults. Mr T already owed around £24,000 and Plata were assessing the decision to lend a further £9,000, bringing his total debt to £33,000 - more than his annual salary. Plata say it was satisfied that he was not reliant on credit or in a cycle of debt. His current loan repayments were £930. With the new loan repayment, a total of £1,294.03 represented very high monthly debt servicing and, as such, required a robust level of affordability checks. I don’t think Plata met this threshold and I’ll explain why. Instead of accepting Mr T’s claim that he was not responsible for any accommodation expenses, it added 30% of the mortgage repayment shown on his credit file to his debt repayments. The resulting disposable income of £654.37 was cross referenced with the Office of National Statistics data (ONS) to establish whether the loan was affordable. These numbers were obtained from Mr T’s credit file or provided by him and were manually verified and agreed by him. However, he does not believe they were a true reflection of his circumstances and I agree. Plata were in possession of data that showed Mr T’s true circumstances and having reviewed the open banking data that Plata possessed, there were some inconsistencies. For example, there were incoming child benefit payments which indicated Mr T did have dependents when he declared he didn’t. Also, there were mortgage payments leaving the joint account, when Mr T said his wife paid the mortgage alone. As such, I’m not convinced that Plata assessed Mr T’s open banking data robustly and it did have a responsibility to do so. With all that said, had Plata asked further questions, I am confident Mr T would have satisfied it of his ability to repay the loan and the open banking data would have supported this. Without using his bonus month, it showed his actual average income from January 2024 to July 2024 was £2,130 and his wife’s income was similar. Based on the outgoings in

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Mr T’s open banking data, he would have been left with a reasonable monthly disposable income and when taking the entire household into account, the disposable income across both account holders was significantly higher. Whilst I don’t doubt what Mr T has said about his financial situation now, the application evidence presented to Plata in July 2024 suggested a different outlook. My role is to assess whether Plata should have reasonably known that it would be irresponsible to lend to Mr T when it did. Based on everything it had access to I think Plata reached a fair decision to lend to him. In reaching my conclusions, I’ve also considered whether the lending relationship between Plata and Mr T might have been unfair to Mr T under Section 140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that Plata did not lend irresponsibly when providing Mr T with the loan. And I haven’t seen anything to suggest that s140A CCA would, given the facts of this complaint, lead to a different outcome here. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 27 April 2026. Caroline Oliver Ombudsman

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