Plata Finance Limited · DRN-6261298

The complaint Mr C complains that Plata Finance Limited lent irresponsibly when it approved two loan applications he made. What happened Mr C successfully applied for the following loans with Plata: Loan Date Loan amount Interest Total Loan Amount Term APR Monthly Payment 1 May- 24 £3,000 £2,857.93 £5,857.93 60 months 34.90% £97.63 2 Jul-25 £5,000 £3,333.50 £8,333.50 60 months 24.70% £138.99 In both applications, Mr C confirmed he was a homeowner without mortgage and employed. Mr C gave a net monthly income of £3,113 for loan 1 and £3,257 for loan 2. Plata used a service provided by a credit reference agency to help verify Mr C’s income. Credit searches were completed. In May 2024, Plata found Mr C had outstanding unsecured debts of £37,147. No adverse or recent missed payments were noted. In July 2025 Mr C’s unsecured debts increased to around £46,050. Again, no adverse information or recent missed payments were noted. Plata completed affordability assessments for both loan applications and says Mr C had sufficient disposable income on each occasion to sustainably afford the new loan repayments. Loan 2 ran consecutively with loan 1. More recently, Mr C complained that Plata lent irresponsibly and it issued a final response. Plata said it had completed the relevant lending checks before approving both applications and didn’t agree it lent irresponsibly. An investigator at this service thought the decision to approve loan 1 was reasonable based on the information Plata obtained about Mr C. The investigator upheld Mr C’s complaint about loan 2 and said more detailed lending checks would’ve likely found he was gambling at a high rate and new loan repayments were unlikely to be sustainable. The investigator asked Plata to refund all interest, fees and charges applied to loan 2. Plata didn’t agree so Mr C’s complaint has been passed to me to make 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. Before agreeing to lend, the rules say Plata had to complete reasonable and proportionate checks to ensure Mr C could afford to repay the debt in a sustainable way. These

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affordability checks needed to be focused on the borrower’s circumstances. The nature of what’s considered reasonable and proportionate will vary depending on various factors like: - The amount of credit; - The total sum repayable and the size of regular repayments; - The duration of the agreement; - The costs of the credit; and - The consumer’s individual circumstances. That means there’s no set list of checks a lender must complete. But lenders are required to consider the above points when deciding what’s reasonable and proportionate. Lenders may choose to verify a borrower’s income or obtain a more detailed picture of their circumstances by reviewing bank statements for example. More information about how we consider irresponsible lending complaints can be found on our website. I’m going to look at each application in turn. When Mr C applied for loan 1 his income of £3,113 was verified via a third party service provided by a credit reference agency. So I’m satisfied it was reasonable for Plata to use Mr C’s declared income in the application. Mr C’s credit file showed he already owed around £37,000 in other unsecured debt. I think that was reasonably high when compared to Mr C’s income but note he was mortgage free which indicated he had some additional affordability in terms of his regular outgoings. Mr C’s monthly payments were factored into Plata’s affordability assessment. And I note there was no evidence of any adverse credit or recent missed payments. The affordability assessment used Mr C’s income and made deductions for his credit commitments, general living expenses and new loan payment. Overall, I’m satisfied the outgoings used by Plata in the affordability assessment for loan 1 were reasonable. And I’m satisfied the affordability assessment showed Mr C had sufficient disposable income to sustainably afford the new repayments of £97.63 a month. In my view, the lending checks Plata completed were proportionate to the amount and type of credit it went on to approve. Overall, I’m satisfied the decision to approve loan 1 was reasonable based on the information Plata obtained from Mr C. I’m sorry to disappoint Mr C but I haven’t been persuaded Plata lent irresponsible when it approved loan 1. Like the investigator, I think the fact Mr C’s unsecured debt levels increased significantly between his applications was a sign he may’ve been borrowing at an unsustainable rate. In May 2024 Mr C owed around £37,000, but by July 2025 his unsecured debts increased to around £46,050. In my view, an increase of £9,000 in a little over a year, including two new accounts being opened in the previous six months doesn’t indicate Mr C was in a stable financial position. I think it would’ve been proportionate for Plata to have completed a more detailed set of lending checks to get a clearer picture of his income and outgoings. One option would’ve been to review Mr C’s bank statements which is the approach I’ve taken. Mr C’s bank statements show his income was in line with the figures Plata used in its affordability assessment. Mr C’s regular outgoings for items like his general living expenses, unsecured debts, communications and supermarket shopping were affordable in terms of Mr C’s earned income each month. But Mr C’s bank statements also show that the majority of transactions on his bank account related to gambling via various websites. As an example, in April 2025, Mr C’s bank statements show losses of around £2,900. Mr C’s bank statements for May and June 2025 show a similar pattern. I’m satisfied that that Mr C’s bank statements show he was gambling in a harmful way that was unlikely to be sustainable in the long term. In my view, a review of Mr C’s bank statements for a more detailed check of his

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income and outgoings would’ve shown Plata he was gambling heavily and unlikely to be able to sustainably afford new repayments of £138.99 a month. As I haven’t been persuaded Plata lent responsibly in relation to loan 2 I’m upholding Mr C’s complaint and directing it to refund all interest, fees and charges applied. I’ve considered whether the business acted unfairly or unreasonably in any other way including 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 Mr C in the circumstances of his complaint. I’m satisfied, based on what I’ve seen, that no additional award would be appropriate in this case. My final decision My decision is that I uphold Mr C’s complaint and direct Plata Finance Limited to settle as follows: Add up the total repayments Mr C has made to loan 2 and deduct these from the total amount of money he received. a) If this results in Mr C having paid more than they received, any overpayments should be refunded along with time weighted Bank of England base rate plus 1% simple interest per year* (calculated from the date the overpayments were made until the date of settlement). † Plata Finance Limited should also remove all adverse information regarding this account from Mr C’s credit file. b) If any capital balance remains outstanding, then Plata Finance Limited should arrange an affordable and suitable payment plan with Mr C. Once Mr C has cleared the balance, any adverse information in relation to the account should be removed from their credit file. † HM Revenue & Customs requires Plata Finance Limited to take off tax from this interest. Plata Finance Limited must give Mr C a certificate showing how much tax it’s taken off if they ask for one. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 14 May 2026. Marco Manente Ombudsman

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