Everyday Lending Limited · DRN-4280056

Complaint Miss A has complained about a loan Everyday Lending Limited (trading as “Everyday Loans”) provided to her. She says the loan was unaffordable. Background Everyday Loans provided Miss A with a loan for £1,200.00 in September 2021. This loan had a term of 18 months and an APR of 249.5%. This meant that the total amount to be repaid of £2,744.64, including interest, fees and charges of £1,544.64, was due to be repaid in 18 monthly instalments of £152.48. One of our adjudicators reviewed Miss A’s complaint and she thought Everyday Loans shouldn’t have provided Miss A with her loan. So she thought that Miss A’s complaint should be upheld. Everyday Loans disagreed so the case was passed to an ombudsman for a final decision. My findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. We’ve explained how we handle complaints about unaffordable and irresponsible lending on our website. And I’ve used this approach to help me decide Miss A’s complaint. Having carefully considered everything I’ve decided to uphold Miss A’s complaint. I’ll explain why in a little more detail. Everyday Loans needed to make sure it acted fairly and reasonably when lending to Miss A. In practice, what this means is Everyday Loans needed to find out enough about Miss A such that it could have a reasonable understanding of whether Miss A could afford to repay any credit it provided. Our website sets out what we typically think about when deciding whether a lender’s checks were proportionate. Generally, we think it’s reasonable for a lender’s checks to be less thorough – in terms of how much information it gathers and what it does to verify it – in the early stages of a lending relationship. But we might think it needed to do more if, for example, a borrower’s income was low or the amount lent was high. And the longer the lending relationship goes on, the greater the risk of it becoming unsustainable and the borrower experiencing financial difficulty. So we’d expect a lender to be able to show that it didn’t continue to lend to a customer irresponsibly. The information Everyday Loans has provided suggested that it carried out a credit check and requested copies of bank statements from Miss A before this loan was provided. The

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results of which showed that Miss A was already paying a significant proportion of her monthly income towards credit repayments and was in a cycle of high-cost lending, which she was in arrears on. I also have concerns that Miss A was supposedly going to consolidate, at least some, debts that had much lower rates of interest than this one. So it’s unclear to me how this loan, which was on such disadvantageous terms, was going to improve Miss A’s outgoings going forward. I don’t think the note about educating Miss A about the impact of doorstep lending changes this. Indeed I’ve also noted that Everyday Loans’ own notes state it was concerned about indebtedness and recency. And that a significant proportion of what I consider to have been Miss A’s low monthly income was being taken up by repayments to credit. Overall and having considered everything, I’m persuaded by what Miss A has said about already being in a difficult financial position at the time she took out this loan. And while it’s possible Miss A’s difficulties reflected her choices rather than financial difficulty, I’d add that my experience of these types of cases suggest this is unlikely, in the absence of any reasonable or plausible arguments from Everyday Loans, I’ve been persuaded to accept Miss A’s version of events. As this is the case, I do think that Miss A’s existing financial position meant that she was unlikely to be able to afford the payments to this loan, without undue difficulty or borrowing further. And I’m satisfied that reasonable enquiries into Miss A’s circumstances would more like than not have shown Everyday Loans that it shouldn’t have provided this loan to her. As Everyday Loans provided Miss A with this loan, notwithstanding this, I’m satisfied it failed to act fairly and reasonably towards her. Miss A ended up paying interest, fees and charges on a loan she shouldn’t have been provided with. So I’m satisfied that Miss A lost out because of what Everyday Loans did wrong and that it should put things right. Fair compensation – what Everyday Loans needs to do to put things right for Miss A Having thought about everything, Everyday Loans should put things right for Miss A by:  refunding all interest, fees and charges Miss A paid on her loan;  adding interest at 8% per year simple on any refunded payments from the date they were made by Miss A to the date of settlement†  removing any and all adverse information it recorded about this loan from Miss A’s credit file. † HM Revenue & Customs requires Everyday Loans to take off tax from this interest. Everyday Loans must give Miss A a certificate showing how much tax it has taken off if she asks for one. My final decision For the reasons I’ve explained, I’m upholding Miss A’s complaint. Everyday Lending Limited should 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 A to accept

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or reject my decision before 7 September 2023. Jeshen Narayanan Ombudsman

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