Admiral Financial Services Limited · DRN-6122615

The complaint Miss K complains Admiral Financial Services Limited (‘Admiral’) irresponsibly lent to her. What happened Miss K took out an unsecured loan from Admiral. This loan commenced on 17 September 2024 and was for £27,000; the monthly repayments were £565.49 and the total repayable was £40,715.28. This had an APR of 15.6% and a 72-month term. The loan was taken out for debt consolidation, with the remainder paying for home improvements. Miss K says Admiral didn’t carry out the necessary and proportionate checks before lending to her. She says she was already in substantial debt and had recently taken out another large line of credit. Miss K believes that if Admiral had completed proper checks, they wouldn’t have approved the loan, so she feels the lending was irresponsible. She says the loan has affected her mental health and caused her financial and emotional stress. Miss K wants Admiral to refund all the interest she has paid and pay her compensation. Admiral issued a final response letter on 27 October 2025. They said that before giving out the loan they carried out checks to ensure that Miss K could pay this back. They say their checks showed the loan to be affordable based on the information available to them. They don’t agree that they lent irresponsibly. Miss K wasn’t satisfied with Admirals response and referred her complaint to this Service. Our Investigator didn’t uphold the complaint. She reviewed the available evidence for the period leading up to the application and concluded the affordability assessment completed by Admiral was not reasonable and proportionate. She obtained copies of Miss K’s bank statements to understand what additional checks would have shown. Once she had reviewed these, she decided that Admiral had made a fair lending decision and that the loan was affordable based on the evidence she had seen. Unhappy with this, Miss K asked for an ombudsman’s review. She says her partner’s financial contributions shouldn’t have been included in the assessment, as the loan was solely in her name. She also feels her income and essential spending didn’t leave the disposable income stated. Miss K thinks the lending decision wasn’t accurate or in line with responsible lending standards. And although she used the loan to clear two debts, she says this increased her overall borrowing and didn’t improve her financial position. Because an agreement couldn’t be reached, the complaint has been passed to me to decide. 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.

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Having done so, I’ve reached the same outcome as the Investigator, largely for the same reasons. I know this will disappoint Miss K, so I’ll explain why. I’ve kept in mind the regulator’s rules and guidance on responsible lending (set out in its Consumer Credit Sourcebook – CONC) which lenders, such as Admiral, need to abide by. Admiral will be aware of these, and our approach to unaffordable/irresponsible lending complaints is set out on our website. I’ve used this approach to help me to decide Miss K’s complaint. I won’t refer to the regulations in detail here, but will briefly summarise them. The rules and regulations in place at the time Admiral provided Miss K with the loan required them to carry out a reasonable and proportionate assessment to make sure she could afford to repay what she owed in a sustainable way. This is sometimes referred to as an ‘affordability assessment’ or ‘affordability check’. Being able to sustainably repay credit means that they needed to consider whether she could make repayments without undue difficulty, while being able to meet any other commitments and without having to borrow further. There isn’t a ‘set list’ of checks that lenders must complete, but they must 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 financial difficulty) and the amount/type/cost of credit they are seeking, in order to treat them fairly. The checks needed to be borrower focused —so Admiral had to think not just about the likelihood of them getting the funds back, or whether Miss K met their lending criteria. They also had to consider if she could sustainably repay the lending being provided to her. I’ve kept all of this in mind when thinking about whether Admiral did what was needed, before lending to Miss K. When Admiral approved the application, they verified her declared income of £43,000. They completed a credit check to understand Miss K’s credit commitments and repayment obligations. Their checks showed she was managing her existing credit well. She had unsecured debts of around £51,490 and was making regular repayments towards this. There were no signs of financial difficulty such as defaults or missed payments. There wasn’t any evidence of county court judgements (CCJs), Individual Voluntary Arrangements (IVAs) or bankruptcy recorded. They say they estimated her living costs using data from the Office for National Statistics, (sometimes known as ONS). Whilst I understand why they did this, ONS figures reflect the spending of an average consumer. Admiral was providing Miss K with a large loan that was due to run for six years – with a repayment amount that was a significant portion of Miss K’s monthly income - around £570 per month. Considering this alone, I don’t think it’s appropriate for Admiral to use generic estimated data to decide whether or not Miss K could sustainably repay the loan. I’m not saying that Admiral needs to assess statements for every lending decision. However, there are times if the credit being provided is large, the monthly repayment amounts are high and the loan is due to run for a number of months, we may expect lenders to carry out more detailed checks. In Miss K’s case, I think Admiral should have taken additional steps. In situations like this, where I can’t see that reasonable and proportionate checks were completed, I need to consider what those checks would likely have shown. To do this, I’ve reviewed the bank statements Miss K provided to understand her financial position around the time of the application. This means I can consider what additional checks would most likely have shown the lender.

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In the months leading up to the loan, Miss K’s average income was around £2,842, and she also received child benefit of £102 per month. Her partner made regular contributions averaging £1,900 a month, as evidenced by monthly transfers on her bank statements. I understand the loan is in Miss K’s name, but these regular contributions reduced the expenses she had to meet from her own income. This meant her overall incoming funds were around £4,844 per month. Her committed household expenditure was around £1,931 – made up of £739 in general expenses, £920 on her mortgage, and £272 on childcare. She was also making payments of around £1,335 each month towards existing credit commitments. This left disposable income of approximately £1,578. So, based on this, I’m satisfied that if Admiral had carried out additional checks, they would still reasonably have concluded that the loan was affordable. I appreciate the financial difficulties Miss K has described, and I’m sorry to hear about the impact this has had on her mental health. But I do need to focus on what Admiral ought reasonably to have known at the time of lending. The information available to them, including the CRA data, didn’t show any signs of financial difficulty. There was no evidence of the additional unsecured lending Miss K refers to. While there were a lot of payments to creditors, everything appeared to be well managed and so I don’t think that Admiral acted unfairly. Miss K also told Admiral she intended to use the loan to clear two existing debts. This would have reduced her overall borrowing by around £24,148 and lowered her monthly repayments by about £540. The evidence shows she did use the loan funds in this way, allowing her to reduce her monthly outgoings and repay her debts more quickly. So, she was ultimately in a better financial position after taking out the loan. I’ve thought carefully about what Miss K has said. However, I’ve had to rely on the available data to help me to decide whether Admiral acted fairly when lending to Miss K. I’m satisfied, having reviewed the evidence, that the loan repayment appeared affordable for Miss K at the time of application. I’m of the opinion that Admiral would’ve been reasonably entitled to think they wouldn’t be increasing Miss K’ existing indebtedness in a way that was unsustainable or otherwise harmful. In summary, based on her circumstances, income and fixed costs at the time, the decision to approve the loan was reasonable. In reaching my conclusions, I’ve also considered whether the lending relationship between Admiral and Miss K might have been unfair to Miss K under s140A of the Consumer Credit Act 1974 (“CCA”). However, for the reasons I’ve already explained, I’m satisfied that Admiral did not lend irresponsibly when providing Miss K with the loan. And I haven’t seen anything to suggest that s140A CCA would, given the facts of this complaint, lead to a different outcome here. So, while it’ll likely come as a disappointment to Miss K, I won’t be upholding her complaint against Admiral for the reasons explained above. I would however remind Admiral of their ongoing obligation to treat Miss K fairly, and with forbearance. My final decision I am not upholding Miss K’s complaint against Admiral Financial Services Limited.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Miss K to accept or reject my decision before 21 April 2026. Alison Wharton Ombudsman

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