Madison CF UK Limited · DRN-6320368

The complaint Mr P complains that Madison CF UK Limited trading as 118 118 Money (118 118 Money) lent to him irresponsibly by making insufficient affordability checks when granting him a loan. What happened Mr P applied for and was granted the following loan from 118 118 Money Date Amount of Credit Interest Rate Loan Term Monthly Repayment July 2024 £4,000 49.9% 36 months £195.48 In summary, Mr P says reasonable and proportionate checks were not made before his loan application was granted. He says had reasonable and proportionate checks been made they would have shown multiple existing lines of credit. He also says these included a number of loans from high-cost lenders shortly before the lending decision. Mr P says this should have required enhanced checks and had they been made the lending would not have been offered. Mr P complained to 118 118 Money in November 2025 who considered his complaint but didn’t uphold it. In their Final Response Letter dated December 2025 118 118 Money said proportionate checks had been made at the time of the lending and affordability checks showed the lending was likely affordable. Mr P disagreed and the matter was brought to this service in January 2026. An investigator considered the merits of the case and considered the available evidence, In his view, he said the checks made by 118 118 Money had been reasonable and proportionate to the lending. He also said the residual disposable income after the new lending was such that sustainable repayment was unlikely to be made. Mr P accepted the investigator’s view but 118 118 Money didn’t and as there is no agreement, the matter has come to me for a final decision. Having considered the case, I reached a different outcome to the investigator, so issued a provisional decision. An extract follows and forms part of this final decision. As both parties have since replied, this allows me to issue a Final Decision now. 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. Extract from my provisional decision When Mr P applied for his loan, he declared a net monthly income of £1,964 and said he was in full time employment. A monthly expenditure of £400 relating to housing costs was also made,

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118 118 Money took these disclosures and referenced Mr P’s credit file to gain a view of his wider financial situation. The credit file referenced by 118 118 Money is comprehensive containing more than just summary data. It had many broadly positive features. There were no reported County Court Judgments, Individual Voluntary Arrangements (IVA) or active arrangements with creditors. There was a default recorded but significant time had elapsed for this to have been treated as an historic default, not necessarily reflecting Mr P’s current financial state. The file showed no dependence on payday loans and no recent defaults. Account management appeared to be good with no arrears or missed payments within the previous six months. But there were potentially problematic entries too. Three accounts (two loans and a credit card) had been taken out within the previous six months, debt to income ratio was moderate at 75% and declared expenditure detail was modest with heavy reliance on Office of National Statistics (ONS) data modelling rather than Mr P’s actual expenditure. I recognise the checks made by 118 118 Money and the fact that the credit being offered is relatively modest at £4,000. I also note the investigator’s view that checks had been reasonable and proportionate. I have considered this carefully but am minded to say in this case that the checks made were not reasonable and proportionate for the lending. I say this because of the reliance on modelled expenditure data, the verification of income by account turnover alone and the proximity of two new loans and a credit card to this lending decision. 118 118 Money point out that taking on £12,000 of credit is not in itself evidence of financial stress and I am minded to agree with them. I don’t think it would automatically rule out further lending, but I do think 118 118 Money should have done more to find out why that level of borrowing was necessary. I would also have expected income to be verified more exactly and Mr P’s actual expenditure to be established rather than ONS modelling alone. I also think the relatively low calculated disposable income is a relevant consideration. I don’t think reference to current account records would have been necessary or appropriate given the lending being considered. But I do think income and expenditure should have been explored more than was the case. Having said I am minded to say checks were not reasonable or proportionate, I must consider what reasonable and proportionate checks would have revealed had they been made. For this I have referenced current account statements provided by Mr P as these are the best evidence available to me from the time. These relate to the three months leading up to the lending decision. I have used these to recreate an understanding of Mr P’s income and expenditure at that time rather than conducting a forensic examination of line item spending. Having examined Mr P’s records, I can see income from his employer in line with the declared salary on his application form. In addition, there are significant receipts from items marked as rent suggesting a further income stream not likely to appear on credit files or bureau data. It is unclear to me whether this had been factored into the disposable income calculations performed by 118 118 Money. My provisional decision will allow both parties to see relevant materials and comment further should my reading of these records be incorrect.

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Based on my examination of the current account records, though disposable income after existing commitments is not large, I am persuaded that it is at a level where is was likely sustainable repayments could be made. Given what I have said, I am minded provisionally to say that the lending decision was fair. 118 118 Money accepted my provisional decision but Mr P didn’t. I have been provided with additional information from Mr P in the form of annotated income and expenditure summaries. I have considered these carefully and given thought to the points raised by Mr P. I will address these briefly in the remainder of this decision. Additional rental income In his response to my provisional decision, Mr P acknowledges that rental income formed a part of his income during the run up to the lending decision. On Mr P’s own figures, this averaged £2,993 per month over the period in question. This was in addition to the declared salary on the application form. 118 118 Money has also indicated it was unaware of this additional income so couldn’t factor it into their disposable income calculations. Without this income stream, disposable income based on application data, intern al modelling and ONS datasets was calculated by 118 118 Money as being around £131 per month. This is not a huge disposable income, but I have not seen anything to cast doubt on how it was derived given what had been disclosed to the lender. Turning to the additional rental income, Mr P asks me to discount some of this as these were either one off payments so not representative or were personal transfers to him. I am quite prepared to consider these as a different type of income (not from rent), but there is nothing I have seen to suggest these should not be counted as income at the time. Similarly, I think this is reasonable to count towards the calculation of disposable income. Given this, I remain of the view that disposable income was such that sustainable repayment could likely be made. I think the lending decision made by 118 118 Money was a fair one. In reaching my conclusions, I’ve also considered whether the lending relationship between Mr P and 118 118 Money might have been unfair to Mr P under s140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that 118 118 Money did not lend irresponsibly when providing Mr P with the loan. 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 Mr P’s complaint against Madison CF UK Limited trading as 118 118 Money Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or

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reject my decision before 25 May 2026. Richard Bellamy Ombudsman

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