Madison CF UK Limited trading as 118 118 Money · DRN-6160436

The complaint Mr L complains that Madison CF UK Limited trading as 118 118 Money (118 118 Money) provided three loans and a credit card to him irresponsibly, as it didn’t fully understand his financial position. Mr L referred his complaint regarding the loans and the credit card to the Financial Ombudsman Service. The credit card complaint has been considered separately. I’m therefore only considering the provision of the loans. What happened In January 2023 118 118 Money agreed a loan of £5,000, which was repayable in instalments of £258.75 over 36 months. The Annual Percentage Rate (APR) was 58.9%. Mr L decided to settle this loan within three weeks of receiving the funds. In July 2023 118 118 Money agreed a loan of £5,000, which was repayable in instalments of £354.97 over 24 months. The APR was 79.9%. Mr L again decided to settle this loan early, within six weeks of receiving the funds. In January 2024 118 118 Money agreed a loan of £3,000, which was repayable in instalments of £212.63 over 24 months. The APR was 79.9%. In May 2025, Mr L complained to 118 118 Money. He said 118 118 Money hadn’t adequately considered his personal and financial circumstances when providing the loan. He also mentioned he was struggling to meet priority bills and had to borrow more to pay the loan. 118 118 Money looked into his complaint. It said Mr L was taken through extensive questions on its website. This allowed it to capture information regarding his income and expenditure and his personal details. 118 118 Money said it verified the information provided by Mr L. It also used Credit Reference Agency (CRA) data and modelling of reasonable average figures to establish his outgoings. The information was then assessed to determine if the lending was affordable and appropriate. For each loan, 118 118 Money said its enquiries didn’t reveal any County Court Judgements (CCJs) or other significant factors that would indicate a history of poor credit. 118 118 Money noted there was some negative CRA data, such as missed payments and instances of credit limits being exceeded. However, it said these didn’t have a material adverse impact. 118 118 Money was satisfied it had made proportionate checks, and the agreements were likely to have been affordable. 118 118 Money also invited Mr L to contact it, if he needed to discuss options relating to affordable payment arrangements. Mr L remained dissatisfied and referred his complaint to the Financial Ombudsman Service. He raised the same concerns as he’d previously put to 118 118 Money. Mr L also said he

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had a gambling addiction at the time he took out the loans. And the loans had put a strain on his everyday living expenses, which had impacted his mental health. Mr L said that the negative markers on his credit file are making future planning difficult in respect of getting a mortgage and other financial goals. Our investigator said that for the first two loans he believed 118 118 Money had conducted reasonable and proportionate checks. These checks had shown that the loans were affordable. And 118 118 Money had not treated Mr L unfairly when providing these loans. In respect of the third loan, the investigator believed 118 118 Money should have conducted additional checks to better understand Mr L’s financial position. This was because Mr L’s indebtedness had increased quite considerably and six new accounts had been opened in a relatively short period of time. In addition, he noted there had been arrears on a credit card, but that account had since been settled. The Investigator asked Mr L to provide bank statements so he could further consider Mr L’s financial position in the three months leading up to the loan being granted. Mr L said these statements were no longer available and requested the investigator to review his complaint based upon the available information. The investigator said that in the absence of the statements he couldn’t determine if the loan was affordable or not, so he couldn’t ask 118 118 Money to take any further action. Mr L subsequently provided his statements covering October 2023 to December 2023. He explained that during this period he was in Australia. And he believed the statements evidenced the third loan wasn’t affordable. Using the statements, the investigator considered Mr L’s income and essential expenditure. This allowed the investigator to understand what 118 118 Money would have seen, had it conducted further checks. Having considered the income and expenditure, the investigator concluded Mr L had sufficient funds to afford the loan. So, concluded the decision to lend to Mr L was fair. Mr L didn’t accept the investigator’s view and maintained his view that the loan was unaffordable and unsustainable. Mr L stated he had a reliance on informal financial support and was financially vulnerable. The investigator further explained his reasoning. But as an agreement couldn’t be reached the complaint has been referred to me for a decision. 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 approach to complaints about irresponsible lending on our website, including the key relevant rules, guidance, good industry practice, and law. I’ve considered this approach when deciding this complaint. 118 118 Money needed to conduct reasonable and proportionate checks to ensure it didn’t lend to Mr L irresponsibly. It’s not about 118 118 Money assessing the likelihood of it being repaid, but it had to consider the impact of the repayments on Mr L. There is no set list of checks it had to perform, but it could consider different things such as the amount of the credit, the amount of the monthly repayments, and the overall circumstances of the borrower.

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Loan one During the application process Mr L stated he was self-employed with a monthly income of £2,829. This was verified by 118 118 Money, through the CRA, using industry standard tools. Mr L said he was living with his parents at the time. 118 118 Money performed affordability calculations, based upon the income information and CRA data. Mr L’s living costs were assessed using Office for National Statistics (ONS) data. Using ONS estimates is a reasonable method for lenders to use to calculate a consumer’s disposable income. But it must ensure there aren’t other factors which would suggest a greater understanding of the individual’s circumstances are required. The data 118 118 Money used indicated Mr L had a disposable income of £1,205.31 after the new loan repayment of £258.75 was factored in. This was based upon his income of £2,829 and essential living and committed expenditure of £1,364.94. 118 118 Money concluded this demonstrated the loan was affordable. As noted above the CRA data included negative data, but at the time the loan was offered Mr L’s financial accounts were up to date. 118 118 Money said there were a few negative indicators such as missed payments and over limits on the credit report; however, these did not have a material adverse impact, and the majority of active accounts were well maintained and up to date. 118 118 Money said that it specialises in lending to consumers who may struggle to obtain credit from mainstream lenders. And that some adverse credit information, such as a few missed payments, is common. It therefore did not consider Mr L’s historical issues to be a reason to decline the application. Overall, I consider this to be a legitimate business decision. Taking all this into consideration, I’m satisfied the checks 118 118 Money undertook were reasonable and proportionate. I say this because its calculations showed Mr L had a good level of disposable income, and the loan appeared to be affordable. Also, I don’t believe the historic negative CRA data should have prompted 118 118 Money to conduct a more in- depth consideration of Mr L’s circumstances. Therefore, I don’t believe 118 118 Money’s decision to provide this loan was unfair to Mr L. Loan two During the application process Mr L stated he was self-employed with a monthly income of £3,610. Again, this was verified by 118 118 Money, through the CRA, using industry standard tools. Mr L was living with his parents at the time. As previously, 118 118 Money performed affordability calculations, based upon the income information and CRA data. Mr L’s living costs were assessed using ONS data. The data 118 118 Money used indicated Mr L had a disposable income of £1,934.80 after the new loan repayment of £354.97 was factored in. This was based upon his income of £3,610 and essential living and committed expenditure of £1,320.23. 118 118 Money concluded this demonstrated the loan was affordable. Again, the CRA data included historic negative data, but at the time the loan was offered, Mr L’s financial accounts were up to date. The CRA data showed that Mr L’s indebtedness had reduced since his previous loan application.

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Taking all this into consideration, I’m satisfied the checks 118 118 Money undertook were reasonable and proportionate for the same reasons as loan one. Therefore, I don’t believe 118 118 Money’s decision to provide this loan was unfair to Mr L. Loan three During the application process Mr L stated he was self-employed with a monthly income of £3,319. Again, this was verified by 118 118 Money, through the CRA, using industry standard tools. Mr L was living with his parents at the time. As above, 118 118 Money performed affordability calculations, based upon the income information and CRA data. Mr L’s living costs were assessed using ONS data. The data 118 118 Money used indicated Mr L had a disposable income of £1,582.39 after the new loan repayment of £212.63 was factored in. This was based upon his income of £3,319 and essential living and committed expenditure of £1,523.97. 118 118 Money again concluded this demonstrated the loan was affordable. The CRA data included historic negative data, but at the time the loan was offered Mr L’s financial accounts were up to date. The CRA data showed that Mr L’s indebtedness had increased since his previous loan application. And he had opened six new accounts in the preceding six months. I’ve also considered Mr L’s unusual pattern of borrowing. This was the third loan he had taken with 118 118 Money in a little over a year. His previous two loans had been settled shortly after taking them out. And I can see from the notes that between loan two and loan three, Mr L had applied for a further loan, which appears to have been declined. Mr L also raised concerns with 118 118 Money regarding the interest he had been charged when settling the second loan. So, taking all this into consideration, I believe the checks 118 118 Money completed on this occasion were not reasonable and proportionate. It should have taken steps to better understand Mr L’s financial circumstances, before agreeing to provide the loan It was important for 118 118 Money to get a more accurate view of Mr L’s income and expenditure, before deciding if it was appropriate to provide the loan. So, I’ve considered what Mr L’s financial position would have looked like at the time. I’ve done this by looking at his bank statements. To be clear, I’m not stating this action should have been taken by 118 118 Money. There are other ways in which it could have gained a greater understanding of Mr L’s circumstances. But using the bank statements is a straightforward way for me to get an understanding of Mr L’s financial position at the time. Mr L’s bank statements indicate an average monthly income of around £2,800. I reviewed his regular financial commitments and essential living expenses and deducted these from his income. Based on this, his monthly average disposable income was around £2,100. So, I’m satisfied that a more detailed assessment of Mr L’s income and expenditure would have demonstrated he could afford the loan. In other words, if 118 118 Money had conducted additional checks, the evidence suggests its decision to lend would have been the same. Having determined the loan was affordable I’ve then considered whether the decision to lend to Mr L was fair. Mr L has told us he had a gambling addiction at the time he took out the loans. I recognise that such vulnerabilities aren’t always visible to a lender, and consumers don’t always disclose the difficulties they are experiencing. And having carefully considered Mr L’s bank

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statements, I haven’t seen evidence that would reasonably have alerted 118 118 Money to Mr L’s gambling. Mr L said that the loan repayments had put a strain on his everyday living expenses. But again, based upon the evidence Mr L has shared with us, he appears to have significant disposable income to meet these costs. Mr L is concerned that negative data on his CRA report may impact his future plans, such as getting a mortgage. However, as I don’t believe 118 118 Money did anything wrong when providing the loans, I won’t be asking it to remove the data it has shared with the CRAs. I’m sorry to hear of the impact Mr L’s finances have had on his mental health and I would encourage him to seek the support he needs to address these difficulties. But having considered all the above, I don’t believe 118 118 Money was unfair to Mr L when it provided the loans. In reaching my conclusions, I’ve also considered whether the lending relationship between 118 118 Money and Mr L might have been unfair to Mr L under Section 140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that 118 118 Money didn’t lend irresponsibly when providing the loans. And I haven’t seen anything to suggest that section140A CCA would, given the facts of this complaint, lead to a different outcome here. My final decision It follows that I’m not upholding this complaint as I don’t think Madison CF UK Limited trading as 118 118 Money lent to Mr L irresponsibly or unfairly. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr L to accept or reject my decision before 23 April 2026. David Hilton Ombudsman

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