Gain Credit LLC trading as Lending Stream · DRN-6151345

The complaint Mr F complains that Gain Credit LLC trading as Lending Stream lent to him irresponsibly. What happened Mr F took two loans. The first was for £400 on 10 November 2023 and the scheduled repayments were £119.55 each month for five months and a final instalment of just under £118. This was paid back within days on 22 November 2023. In April 2025, seventeen months later, Mr F took a second loan for £500, repayable as £154.61 each month for five months followed by a sixth instalment of just over £154. This was repaid early on 27 June 2025 after receiving a Notice of Sums in Arrears in May 2025 (NOSIA). Mr F complained TO Lending Stream in September 2025. Mr F said that he had multiple defaulted accounts and multiple credit accounts open when he was lent to. Mr F says he had a gambling addiction at the time a review of his bank statements would have shown Lending Stream that he could not afford the loans. He said that Lending Stream ought to have done more checks. After Mr F had referred his complaint to the Financial Ombudsman Service, one of our investigators found no reason to uphold the complaint about Loan 1. But our investigator did think that Lending Stream ought not to have approved Loan 2. Mr F agreed with that outcome. Lending Stream did not and gave reasons why. The unresolved complaint about Loan 2 was passed to me to decide. As both parties had accepted the Loan 1 outcome then that is undisputed. After I had reviewed the file, I asked Mr F for additional financial information for the months leading up to Loan 2 approved in April 2025. Mr F did send me some information but not much. The duty of care Mr F refers to is built into the Consumer Duty and the regulatory structure surrounding responsible lending. And I have applied those principles. After I had reviewed the complaint and all the evidence, on 9 March 2026 I issued a provisional decision giving reasons why I did not think that the complaint ought to be upheld. For ease of reading that is duplicated here: What I provisionally decided on 9 March 2026 – 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 general approach to complaints about this type of lending - including all the relevant rules, guidance and good industry practice - on our website. Lending Stream needed to make sure that it didn’t lend irresponsibly. In practice, what this means is that it needed to carry out proportionate checks to be able to understand whether any lending was sustainable for Mr F before providing it.

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Our website sets out what we typically think about when deciding whether a lender’s checks were proportionate. And I’ve used this approach to help me decide Mr F’s complaint. 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 that information – 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, the amount lent was high, or the information the lender had – such as a significantly impaired credit history – suggesting the lender needed to know more about a prospective borrower’s ability to repay. Lending Stream was required to establish whether Mr F could sustainably repay the loan – not just whether he technically had enough money to make his repayments. Having enough money to make the repayments could of course be an indicator that Mr F was able to repay his loans sustainably. But it doesn’t automatically follow that this is the case. All the parties are familiar with the details of the complaint. Many of the figures are set out in the FRL which both parties have and so I do not repeat all that detail. Loan 1 I address one element at the beginning of this decision before turning to Loan 2. It relates to the repayment for Loan 1. Mr F has said to Lending Stream as part of his complaint: ‘but after consistently missing payments in my first loan, then being able to obtain a second should have been a red flag on your side.’ The Statement of Account I have for Loan 1 shows it was paid off many months before Mr F applied for Loan 2 and so I’d not expect Lending Stream to have reviewed his repayment history that far back. And secondly, even if it did, there were no repayment difficulties. Mr F repaid Loan 1 swiftly and all in one go in November 2023. So, I discount Mr F’s submission about his difficulty repaying Loan 1. I’ve factored this part of Mr F’s explanations into my overall assessment of the complaint. Loan 2 Mr F did earn a good income of £5,700 a month after tax. Lending Stream has said that it used an Open Banking technique to identify that his income was £5,700 a month after tax. I have not seen records relating to that but Mr F has not disputed his income and he’s not sent me anything to demonstrate that this figure was incorrect. I am proceeding on that figure as Mr F’s net salary. My experience of checks carried out by lenders, in a variety of ways to verify an income is that usually they are fairly accurate. The figures for Mr F’s declared expenditure and the increased figures following Lending Stream’s assessment are set out in the FRL. The increased monthly figure was £2,422. And even with Lending Stream’s increased figure for the general expenditure for items such as rent, bills, and other usual expenses associated with a household, the figure was well below Mr F’s monthly income of £5,700. The final part of the assessment Lending Stream carried out was in relation to Mr F’s credit commitment costs and even that came in at a relatively modest monthly commitment cost of around £393. I’ve reviewed the raw data Lending Stream obtained. This was a comprehensive list and included closed accounts, defaulted accounts (which I come onto later) and whether they were held as sole accounts or jointly. Just before Mr F applied for Loan 2 in April 2025 he had relatively little open. I list them here to demonstrate this: • A revolving credit account with a £50 limit and a £50 balance, opened in November 2023, and last updated on the data records in April 2025.

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• An unsecured loan which started in October 2024 with an opening balance of £724, repayable at £120 a month over six months. The balance in April 2025 was £362. It was not marked as delinquent and appeared not to have any adverse data associated with it. And it was likely this loan was close to being repaid. • A utility account with a regular payment of £230 a month – and it’s likely that this sum was included in the ‘general expenditure costs’ outlined earlier in this decision. The figure used by Lending Stream as Mr F’s current monthly credit commitment costs of around £393 was about right for those accounts. So, the loan looked affordable. I looked at the accounts which had closed in 2025, just before Mr F applied for this loan. They were an account with a bank, a home credit account and a loan account. I looked at the defaulted accounts. And I consider that this is the crux of this complaint. What was expected of Lending Stream considering Mr F’s default history? I excluded the defaulted accounts from 2019, 2021 and 2022 as these were closed and would have been viewed as historic and therefore not likely to have influenced a credit provider such as Lending Stream. The more recent defaulted ones were: o an unsecured loan (with a debt collection agency) defaulted February 2024 with a default balance of £684 and still outstanding; and o A revolving credit account (with a debt collection agency) defaulted March 2024 with a default balance of £1,555 and still outstanding; and o A revolving credit account defaulted in April 2024, with a default balance of £573 and still outstanding. The account holder status code for that account was ‘Gone Away’ which means it’s likely the account provider had no details for Mr F. I’ve read that Mr F told Lending Stream that he had used differing email addresses and so it’s possible this was what happened with this lender. o A revolving credit account defaulted 30 January 2025 with a default balance of £300, settled 28 March 2025 and closed. So, a summary of above is that of these four defaulted accounts, two were with debt collectors and therefore to Lending Stream would have looked as being managed by a third party and likely satisfactorily so. A third was one which had an anomaly on it as Mr F had been marked as ‘gone away’. And a fourth had been settled immediately after the default was imposed. Balanced against that is the fact that three were more than 12 months before Mr F applied for Loan 2, but one was very recent. Added to all of this was the fact that Mr F’s income and expenditure calculations Lending Stream carried out led to it recognising he had over £2,880 a month left with which to pay for its loans plus anything else not included in the assessment it had done. So, it was fair and reasonable of Lending Stream to have considered that Mr F had income to be able to pay for whatever else was owing on the older defaulted accounts plus the new Loan 2. One of the reasons our investigator upheld the complaint was despite, and because of, the disposable income of around £2,730 a month after paying off the Lending Stream instalments. I’ll have to quote our investigator: ‘I don’t think if [Mr F] had this income available that he would opt to take a high interest loan for £500 which could be repaid in a couple of months if this was a true reflection of his disposable income.’ I disagree that Lending Stream ought to have been expected to have considered this aspect. It’s not expected that Lending Stream ought to have questioned why a person with so much disposable income was applying for a £500 loan. This is not a regulatory requirement.

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A second reason our investigator upheld was because of the defaults. Our investigator had pointed out that Mr F had experienced multiple defaulted accounts since taking and paying off Loan 1. But it’s not – on its own – a reason not to lend, especially when the disposable income was easily enough to afford the loan instalments. I have demonstrated that what Lending Stream had as hard facts about the defaults are set out earlier in this decision. I have thought about the defaults Mr F had been getting. Lending Stream possibly ought to have delved deeper into Mr F’s financial situation. And for me to come to a conclusion, ideally I needed to discover what it would have seen if it had done that. I asked Mr F for more information: for copies of all his bank statements before the second loan – February 2025 to April 2025. I’ve received a copy of one account with a Building Society which had no transactions for February and March 2025 and the only transaction in April 2025 was Mr F receiving the £500 loan from Lending Stream and using it to pay off a revolving credit account. Mr F has referred to his habit of gambling when he took this loan but I’ve seen no evidence of that in the information he has provided. And I reviewed the other complaint files we have for Mr F to see if there was any information there pertinent to this one: neither assisted in giving me any further information. All this fact gathering in the previous paragraphs of this decision leads me to my conclusion having considered the Loan 2 application overall and in context. Using what I have from both parties, my view is that Lending Stream was approached for one loan of £500. It was effectively a first loan as the earlier loan was too far in the past to be particularly relevant to the April 2025 application. And even if it did search its own records it would have seen that Mr F repaid it very quickly which would have been a positive element. The Loan 2 application for £500 was a modest sum and Mr F had a very positive disposable income calculation – around £2,730 after paying off the Lending Stream instalment. As well as this, Mr F had a recent history of a default but it had been paid off quickly and settled. The other defaults in 2024 were all more than 12 months before. Mr F had very little existing credit open. I think that if Mr F had had little disposable income and/or was heavily in debt then my view may have been different. My view is that for this loan in April 2025, Lending Stream made a fair lending decision based on what it knew about Mr F and what it had discovered from its own research. Having a recent default is not a reason, on its own, to refuse a loan application. Ordinarily it may precipitate additional checks but I’ve no evidence from Mr F as to what it would have seen if it had done that. My plan is not to uphold this complaint. This is the end of the duplicated provisional 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. Since issuing the provisional decision on 9 March 2026, Lending Stream acknowledged it and asked if I needed more information which I considered I did not. Mr F emailed me about the additional copy statements and provision of additional financial evidence for the period leading up to April 2025. I responded to say that before I had issued my provisional decision I had invited Mr F to send in copies of all his bank account statements, if he had wished. Before 9 March 2026, I’d received only one copy of one transaction on one account as I had explained in my provisional decision.

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I said to Mr F that it was a matter for him as to what he chose to send to me before the 23 March 2026 which was the reply deadline. But I clarified a point in order to avoid Mr F from experiencing a negative emotion he’d described likely would occur if he did send in those other bank account statements. And that was a matter surrounding evidence to demonstrate extensive gambling. He asked me if they’d make a difference. I explained in my reply that Mr F needed to consider that if Lending Stream had asked him for additional financial evidence in April 2025 when he was applying for Loan 2, what would he have sent to it? Mr F has not sent any further bank statements or other evidence to me since. The reply deadline has passed. Mr F has also asked about verification of an income being transferred to his wife. But I don’t see the relevance of that. And Lending Stream would have been unaware that Mr F transferred his salary to his wife. Mr F seems to confirm that his income was the figure Lending Stream used as his net income and went on to query that Lending Stream ought to have ‘verified other financials’ before lending which he considers it did not. Mr F has told us: ‘I’ve provided all information at this stage and expect a final decision to be made as I do not believe Lending Stream lent in a responsible manner (similar to your findings).’ I have thought about all that Mr F has said and I have reviewed the evidence I have available to me. All my findings and the reasoning relating to them set out in the duplicated provisional decision are repeated here. In summary - the Loan 2 application for £500 was a modest sum and Mr F had a very positive disposable income calculation – around £2,730 each month after paying off the sums he owed and the Lending Stream instalment as I explained in detail in the provisional decision. As well as this, Mr F had a recent history of a default, but it had been paid off quickly and settled. I explained in detail my considerations on those points in my provisional decision. The other defaults in 2024 were all more than 12 months before he applied to Lending Stream for Loan 2. Mr F had very little existing credit open in April 2025. My view is that for this loan in April 2025, Lending Stream made a fair lending decision based on what it knew about Mr F and what it had discovered from its own research. I do not uphold this complaint. I’ve also considered whether Lending Stream acted unfairly or unreasonably in any other way and whether the relationship might have been unfair under section 140A of the Consumer Credit Act 1974. However, for the reasons I’ve already given, I don’t think it lent irresponsibly to Mr F or otherwise treated him unfairly in relation to this matter. I haven’t seen anything to suggest that Section 140A would, given the facts of this complaint, lead to a different outcome here. My final decision I do not uphold the complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr F to accept or reject my decision before 20 April 2026. Rachael Williams

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Ombudsman

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