DRN-5950164

The complaint Mr C is unhappy about Bamboo Limited (“Bamboo”) as he feels they irresponsibly lent to him which has had a significant impact on his personal and financial situation. What happened In June 2025 Mr C applied for a loan with Bamboo. The application was approved, and he was granted £8,396.00. The intended purpose was debt consolidation, and it was due to be repaid over 48 months, with monthly repayments of £274. Shortly after receiving the loan, Mr C complained. He said at the time of lending he had over £100,000 in outstanding balances. He feels a proportionate review would’ve showed he was already over-indebted, but the fact he was provided a loan with such a high interest rate proves proper checks either weren’t conducted, or were but the results of which were disregarded. Bamboo responded to the complaint on 27 August 2025. The rejected the complaint saying they used Credit Reference Agency (CRA) data to verify his income and Office for National Statistics (ONS) data to consider expenditure, the result of doing so showed he was creditworthy for a loan of this amount and duration. Mr C disagreed, so referred his complaint to our Service. An Investigator here looked at things – he felt the checks Bamboo carried out weren’t proportionate, but he was satisfied that if Bamboo had completed further checks, the lending still likely would be affordable for Mr C. Mr C responded disagreeing so our Investigator issued a second opinion. The second opinion changed slightly in that the Investigator now felt the checks completed were proportionate and a fair decision to lend was made. Mr C again, disagreed. He’s gone into great detail in his response, but in summary, he feels the checks aren’t proportionate and his expenditure shouldn’t have been estimated as it’s not reflective of his actual position. I previously issued a provisional decision which said the following: ‘As mentioned above, I’ve reached a different outcome to that of the Investigator, and so I’ll explain my reasoning in detail below. The rules and regulations in place at the time Bamboo provided Mr C with the loan 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 Bamboo had to think about whether repaying the credit sustainably would cause difficulties or adverse consequences for Mr C. In other words, it wasn’t enough for Bamboo to consider the likelihood of them getting the funds back or whether Mr C’s circumstances met their lending criteria – they had to consider if Mr C 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

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financial difficulty) and the amount/type/cost of credit they were seeking. I’ve kept all of this in mind when thinking about whether Bamboo did what was needed before lending to Mr C. I’m satisfied that Bamboo’s checks in relation to Mr C’s income went far enough – but I’m currently minded to say they didn’t do enough when checking his expenditure. I say this because Bamboo have confirmed they used Office for National Statistics (ONS) data to predict what his expenditure was. But looking at the information they held about Mr C, I don’t think it’s fair to say he was representative of an average customer. His income was significant and his active levels of unsecured debt were very large. In addition to this, it’s clear he was using the credit he did have available to withdraw cash, which can be a potential indicator of financial difficulty. If Mr C did have the level of disposable income they’d estimated, he’d be unlikely to need to use this expensive way of obtaining cash. I’ve reviewed the same statements the Investigator used – and agree that when you calculate his income and expenditure he’s left with around £60 per month. I don’t think this is enough disposable income to sustainably repay this new loan, and have enough each month for general expenditure, or to have available funds in the event of an emergency. I’m aware this loan was intended to be used for consolidation, but given the significant amount of his external debt, I don’t think this loan would’ve made such an impact that his disposable income would’ve increased enough to make this lending sustainable for him. I note what the Investigator has said regarding payments in, but Mr C has provided an explanation for this which is backed up by the information in the statements and ultimately, doesn’t make a difference to his overall financial position. So based on what I’ve seen, I’m currently minded to say that the checks completed weren’t proportionate, and a fair decision to lend wasn’t made when considering Mr C’s position, the monthly loan repayment amount and the loan term. In reaching my conclusions, I’ve also considered whether the lending relationship between Bamboo and Mr C might have been unfair to Mr C under s140A of the Consumer Credit Act 1974. However, I’m satisfied that what I direct Bamboo to do in the section below results in fair compensation for Mr C given the overall circumstances of his/her complaint. For the reasons I’ve explained, I’m also satisfied that, based on what I’ve seen, no additional award is appropriate in this case. Having thought about everything, Bamboo should put things right for Mr C by: • removing all interest, fees and charges applied to the loan from the outset. • The payments Mr C made should be deducted from the new starting balance – the £8,396.00 originally lent. If Mr C has already repaid more than £8,396.00 then Bamboo should treat any extra as overpayments. And any overpayments should be refunded to Mr C; • pay interest at 8% simple per year simple on any overpayments, if any, from the date they were made by Mr C to the date of settlement† • if an outstanding balance remains after all adjustments have been made, Bamboo should contact Mr C to arrange a suitable repayment plan, Mr C is encouraged to get in contact with and cooperate with Bamboo to reach a suitable agreement for this. • if no outstanding balance remains after all adjustments have been made, all adverse information Bamboo recorded about this loan should be removed from Mr C’s credit file. † HM Revenue & Customs requires Bamboo to take off tax from this interest. Bamboo must give Mr C a certificate showing how much tax it has taken off if he asks for one.’

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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. Mr C responded to the provisional decision – he accepted what I’d said. Bamboo, however, didn’t. In response to the provisional decision, Bamboo implied I didn’t fully understand how ONS data worked, and that the data they received was calibrated to Mr C’s declared income, household position and dependents. I’d like to reassure Bamboo I’m aware how ONS data is used and applied and considered everything prior to reaching my provisional decision. Bamboo are correct in saying that proportionality doesn’t require lenders to obtain bespoke expenditure evidence in all cases, but to consider whether modelled statistical data is likely to be unreliable. In Mr C’s case, I think the data obtained was likely to be unreliable – and it was – based on his high levels of unsecured debt and the cash advances, which serve as a potential indicator of financial difficulties. It’s not enough to say because Mr C was meeting his existing credit commitments without what appeared to be difficulty that he definitely had enough disposable income to afford the new loan repayments in a sustainable way that wouldn’t cause further financial difficulties. Bamboo haven’t provided any further comments or evidence that has caused me to deviate from my original position, so it follows that I uphold Mr C’s complaint – I don’t think the checks Bamboo completed were proportionate at the time of lending and had proportionate checks been completed, it was clear Mr C was struggling financially and didn’t have enough disposable income to repay the debt in a sustainable way. In reaching my conclusions, I’ve also considered whether the lending relationship between Bamboo and Mr C might have been unfair to Mr C under s140A of the Consumer Credit Act 1974. However, I’m satisfied that what I direct Bamboo to do in the section below results in fair compensation for Mr C given the overall circumstances of his/her complaint. For the reasons I’ve explained, I’m also satisfied that, based on what I’ve seen, no additional award is appropriate in this case. Putting things right Having thought about everything, Bamboo should put things right for Mr C by: • removing all interest, fees and charges applied to the loan from the outset. • The payments Mr C made should be deducted from the new starting balance – the £8,396.00 originally lent. If Mr C has already repaid more than £8,396.00 then Bamboo should treat any extra as overpayments. And any overpayments should be refunded to Mr C; • pay interest at 8% simple per year simple on any overpayments, if any, from the date they were made by Mr C to the date of settlement† • if an outstanding balance remains after all adjustments have been made, Bamboo should contact Mr C to arrange a suitable repayment plan, Mr C is encouraged to get in contact with and cooperate with Bamboo to reach a suitable agreement for this. • if no outstanding balance remains after all adjustments have been made, all adverse information Bamboo recorded about this loan should be removed from Mr C’s credit file.

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† HM Revenue & Customs requires Bamboo to take off tax from this interest. Bamboo must give Mr C a certificate showing how much tax it has taken off if he asks for one. My final decision It’s my final decision that I uphold Mr C’s complaint against Bamboo Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 26 May 2026. Meg Raymond Ombudsman

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