Bamboo Limited · DRN-6258449

The complaint Miss M complains that a personal loan provided by Bamboo Limited (referred to in this decision as Bamboo) was lent to her irresponsibly. She complains Bamboo didn’t do enough to check the lending would be affordable for her. What happened Bamboo provided Miss M with two loans. The details of these loans were as follows: Loan Taken Amount* To earlier loan** New funds Settled Term (months) Loan payment 1 April 2019 £4,000 December 2019 60 £176.05 2 December 2019 £4,637.61 £3,905.10 £732.51 60 £204.12 * amount of the loan advance **amount that went to settling Miss M’s previous loan In August 2025 Miss M complained to Bamboo. She said Bamboo didn’t carry out proportionate checks before agreeing to lend. She said, if it had done, it would have seen the lending was unaffordable for her. Bamboo didn’t agree it had acted unfairly. It said it considered Miss M’s circumstances and affordability carefully before agreeing to lend. And, as the loan was taken out to consolidate some of Miss M’s existing debts, it would have reduced her monthly spending towards her credit commitments. Miss M’s complaint was considered by one of our investigators. The investigator didn’t think Bamboo had done anything wrong or treated Miss M unfairly, so she didn’t recommend Miss M’s complaint be upheld. Miss M disagreed with our investigator, and the complaint was passed to an ombudsman for a final decision. My provisional decision of 24 February 2026 I issued a provisional decision on 24 February 2026 setting out why I was intending to uphold Miss M’s complaint. In summary, I was intending to uphold Miss M’s complaint because I found that Bamboo hadn’t acted fairy or reasonably to Miss M in providing these loans. In the case of both lending decisions, I found Bamboo didn’t carry out reasonable and proportionate checks before agreeing to lend to Miss M. And I found that, had reasonable and proportionate checks been carried out, it would have become clear the lending wasn’t affordable. Responses to my provisional decision Both Bamboo and Miss M responded to my provisional decision with further considerations. Miss M has provided additional information around her increased outgoings in November 2019 – the month prior to the second loan being agreed. In summary, she has said she needed to cover her essential household bills.

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Bamboo responded to my provisional decision with some additional concerns it wanted me to consider. Bamboo also requested and reviewed some of the evidence I relied on. In summary Bamboo said: - It doesn’t agree there were missed payments present on Miss M’s credit file in the period between loan one and loan two. - It asked if I had considered Miss M’s updated credit report from August 2025 as it believes this report shows that her financial situation improved following loan two, and therefore it doesn’t think Miss M has suffered any detriment. - It said that Miss M was making non-essential purchases from the account she’s provided statements for, and it’s said there were no signs of financial difficulty. - It confirmed the February account statement was provided on the first loan to check the details of Miss M’s bank account. Bamboo also wanted me to confirm I had had sight of additional account statements in Miss M’s name, an account it could see transfers from and to. I want to reassure Bamboo that I have had sight of these account statements. In reaching my decision I have reviewed both Miss M’s personal account statements and the statements for her secondary account from which she paid her bills. While I’ve summarised these responses, for the avoidance of doubt, I wish to confirm that I’ve read and considered everything that’s been provided throughout the course of this complaint. 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 explain how we handle complaints about unaffordable and irresponsible lending on our website. And I’ve used this approach to help me decide Miss M’s complaint. I want to thank both parties for the responses and additional considerations and I have thought carefully about what’s been said. I will go on to address the concerns raised. However, ultimately, my decision on this case hasn’t changed. So I’m still upholding Miss M’s complaint. I’ll go on to explain why in more detail. Our approach to considering irresponsible and unaffordable lending complaints Bamboo needed to make sure it didn’t lend to Miss M irresponsibly. In practice, what this means is that it needed to carry out reasonable and proportionate checks to be able to understand whether Miss M could afford to repay the lending in a sustainable way before agreeing to lend. 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, or the information the lender had – such as a significantly impaired credit history – suggested the lender needed to know more about a prospective borrower’s ability to repay. In reaching my decision, I firstly considered whether Bamboo’s checks were proportionate given the circumstances of the lending agreed. I then went on to consider whether Bamboo made a fair lending decision. Bamboo’s checks

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For both loan one and two, to assess Miss M’s affordability, Bamboo has explained it: • reviewed information provided by Miss M in her application, • verified her declared income using an automated check by a credit reference agency, • carried out a credit check to understand her credit commitments and the status of her accounts, and • completed an ‘affordability assessment’ using the verified income figure, credit commitments identified from the credit check, information provided by Miss M about her housing costs, and statistical data relating to average consumer spending. Bamboo has argued these checks indicated the monthly payments for the loan would be affordable for Miss M in each case. However, Miss M has said she shouldn’t have been lent to. I’ve thought carefully about what Bamboo and Miss M have said. I’ve considered the circumstances of each loan in turn. Loan one – were Bamboo’s checks proportionate? Loan one was provided in April 2019. This loan was for £4,000 and had an APR of 59.7%. The total amount repayable under the loan agreement was £10,563.27, which included interest of £6,563.27. It was agreed the loan would be repaid in 60 monthly payments of £176.05. In Miss M’s loan application, she declared she was working full-time and earning £1,390 a month. Bamboo used an automated check from a credit reference agency which it said scored the accuracy of the declared income figure. Bamboo has said it was the high score returned from this check that verified Miss M’s declared income. In considering this matter, I wouldn’t go as far as Bamboo in saying it verified Miss M’s income. However, Bamboo did take steps to cross check Miss M’s declaration and importantly this meant it wasn’t just relying on what Miss M had said about her income when considering the affordability of the loan. And given this type of cross checking is permitted in the regulator’s rules and guidance, and that it supported what Miss M had declared about her income, I think it was reasonable for Bamboo to have relied on this figure when making its lending decision. The credit checks Bamboo completed showed Miss M had 11 active accounts with total balances of £4,407. These were made up of six credit card accounts, two current accounts (one with an arranged overdraft), and three unsecured loans with balances totalling £2,988 - including a £650 loan which had been taken out over a short term the month prior to this loan application. I can see there were missed payments on Miss M’s credit card accounts including periods within the 12 months prior to this loan application in which Miss M was in three months of arrears. Although there were no defaulted accounts or County Court Judgments recorded against Miss M, I do think that the number of missed payments on her existing accounts ought to have elicited some concern, even though I accept these accounts had been brought up to date. I especially consider this to be the case because, aside from Miss M’s active accounts, Bamboo’s credit search showed that Miss M had a continuous history of ‘pay day type’ borrowing – essentially Miss M had taken out a loan every month consistently for over three years. I think this history should have put Bamboo on notice when considering Miss M’s application, as this pattern of borrowing could indicate Miss M was someone whose income didn’t cover their essential day to day spending and therefore that they were relying on credit to supplement their existing income. Or there was also the possibility Miss M may have been borrowing each month to repay outstanding debts.

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The credit check also showed Miss M had been withdrawing cash on her credit card accounts and had made the minimum payment only on these accounts 38 times in the previous year prior to the lending being applied for. When I consider this alongside Miss M’s lending history and the missed payments identified on her active credit card accounts – I do think Bamboo needed to take further action here. I accept that Bamboo carried out an income and expenditure assessment however, considering the recent missed payments present on Miss M’s credit file and the pattern of continuous short-term lending which potentially indicates a struggle to meet her essential spending commitments – I think Bamboo needed to do more than use statistical data to estimate Miss M’s essential expenditure before concluding this loan would be affordable for her. I say this particularly mindful that I can see Bamboo requested further information from Miss M and, as a result of this, it had a copy of Miss M’s bank statement for the month prior to the lending agreed. Loan one - what would proportionate checks have shown Bamboo? As I’ve explained, Bamboo needed to understand more about Miss M’s essential expenditure before it could reasonably say that the monthly payments were affordable. Bamboo hasn’t disputed this in its response to my provisional decision. As set out above, Bamboo did have a bank statement for the month prior to the loan application. Bamboo has said it used this bank statement to confirm Miss M’s bank account details. However, given I have found Bamboo’s checks weren’t proportionate and as Bamboo had this statement, I consider it reasonable for me to review it to understand more about Miss M’s essential expenditure. The bank statement does confirm that Miss M’s income in the month prior to the lending being agreed was £1,390 which is what she declared it to be. However, when considering Miss M’s housing costs and essential spending, while it shows an initial £500 standing order to Miss M’s joint account – which I understand to be Miss M’s initial contribution to rent, household bills and costs towards food – Miss M continues to transfer money into this joint account throughout the month. And while some money is transferred back again – Miss M’s overall contribution is over £800. This doesn’t include Miss M’s own financial commitments including her car insurance costs, phone costs and other committed bills which are clearly visible as direct debits, or her daily accrued overdraft fees. Once these are factored in alongside the existing credit commitments that Bamboo established Miss M was required to make – Miss M’s salary for the month was broadly account for before she could do anything else. It can also be seen on the provided bank statement that, shortly after Miss M reaches the bottom of her overdraft, a payment of £650 is transferred into the account from a short-term lender. I therefore think proportionate checks would have made Bamboo aware that Miss M was borrowing further as she was struggling to meet her essential living costs from her income. Considering the above, I think that reasonable and proportionate checks would have shown Bamboo that this loan was unaffordable for Miss M. Loan two As £3,905.10 of the £4,637.61 for loan two went towards repaying loan one and I’ve found that loan one shouldn’t have been provided, there is an argument for saying that this is, in and of itself, a reason for me to reach the finding that Bamboo shouldn’t have provided loan two to Miss M. Particularly given it was only provided seven months later. However, I’ve nonetheless gone on to consider whether it was fair and reasonable for Bamboo to provide

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this loan. Loan two was also over a 60 month term and required monthly payments of £204.21. Miss M’s income hadn’t changed since the first loan. Furthermore, Bamboo’s second credit check showed Miss M’s total credit limit on her credit card accounts had increased and she was over £850 more indebted on these accounts than at the time the first credit check took place. While I accept that, as Bamboo has pointed out in its response to my provisional decision, Miss M hadn’t accrued any further arrears on her accounts since loan one had been provided, I do think Miss M had continued to rely on additional credit in order to meet her existing commitments, as her income was proving insufficient to do so. I say this because Miss M had taken out an additional unsecured loan in June 2019 with a starting balance of £3,021 – just over two months after loan one had been financed. And even though Miss M had settled a loan with the proceeds of her first loan from Bamboo, her total credit owed had increased from £4,407 in April to £14,606 by loan two. I therefore still think it ought to have been clear that any consolidation that may have taken place since loan one hadn’t actually materially improved Miss M’s financial position. I can see Bamboo’s income and expenditure assessment found Miss M had fewer monthly credit commitments and statistical data suggested her essential spending had decreased since loan one – however, I’ve found in the month prior to this lending being agreed, Miss M made essential household purchases totalling over £1,000. This is before her personal bills, her credit repayments or the new proposed loan payment had been accounted for. Bamboo reviewed evidence I had relied on and argues that there were no signs of financial difficulty and Miss M was making non-essential purchases from this account. However, while it’s fair to say that Miss M didn’t only stick to essential spending, even where I exclude the non-essential transactions, which, in any event, weren’t included in my assessment of her essential expenditure, the monthly payments were still unaffordable. In these circumstances, I don’t think that any non-essential expenditure means that I shouldn’t uphold Miss M’s complaint. Bearing all of this in mind, not only do I think that reasonable and proportionate checks would have shown loan two to be unaffordable for Miss M, I also think that Bamboo ought to have realised that it was increasing her indebtedness in a way that was unsustainable or otherwise harmful. Therefore, I don’t think Bamboo’s decisions to provide either loan to Miss M were fair. And this means that I’m intending to uphold Miss M’s complaint. In response to my provisional decision, Bamboo indicated it thought Miss M’s current credit report should be considered as, in its view, her financial position had improved since loan two being agreed and therefore it didn’t feel any detriment had been caused. I’m not sure under which circumstances Bamboo have obtained a recent credit file for Miss M. In any event, this complaint is concerned with what proportionate checks would likely have shown Bamboo at the time the lending was agreed. I don’t think that a credit check from six years after the event clearly shows that loan two was beneficial for Miss M. This is especially in circumstances, where for the reasons I’ve explained, I have found Bamboo ought reasonably to have become aware this lending was unaffordable for Miss M. As Bamboo provided Miss M with these loans, I conclude that it failed to act fairly and reasonably towards her. Miss M has ended up paying interest on loans she shouldn’t have been provided with. So I’m satisfied that Miss M lost out because of what Bamboo did and that it should put things right. In reaching this conclusion I’ve also considered whether the lending relationship between Bamboo and Miss M might have been unfair to Miss M under Section 140A of the Consumer Credit Act 1974 (“CCA”).

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However, I’m satisfied that what I’m directing Bamboo to do results in fair compensation for Miss M given the overall circumstances of 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 considered everything, I’m satisfied Bamboo to put things right for Miss M in the following way on the basis that both loans have now been settled: • refund all the interest, fees and charges Miss M paid on both loan one and two; • add interest at 8% per year simple on any refunded interest, fees and charges for both loans from the date they were paid by Miss M to the date of settlement† • remove any and all adverse information that Bamboo may have recorded about these loans from Miss M’s credit file † HM Revenue & Customs requires Bamboo to take off tax from this interest. Bamboo must give Miss M a certificate showing how much tax it has taken off if she asks for one. My final decision For the reasons I’ve explained above and in my provisional decision dated 24 February 2026, I’m upholding Miss M’s complaint. Bamboo Limited should now put things right for Miss M in the way I’ve directed it to do so above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss M to accept or reject my decision before 24 April 2026. Georgina Arnott Ombudsman

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