Valour Finance Limited · DRN-6130530

The complaint Mr W complains Valour Finance Limited trading as Savvy.co.uk (“Valour”) provided him with a loan that was unaffordable. What happened Mr W was provided with one instalment loan for £500 in July 2025. Mr W was due to pay six monthly instalments of £163.75. Based on the latest information I have, an outstanding balance remains due. In response to Mr W’s complaint, Valour said it hadn’t made an error when it approved the loan because it carried out proportionate checks. Unhappy with this response, Mr W referred the complaint to the Financial Ombudsman. The complaint was considered by an Investigator, who didn’t uphold the complaint even though they thought the credit check results ought to have led Valour to carry out further checks. However, the Investigator wasn’t able to say what further checks may have shown as she hadn’t seen Mr W’s bank statements. Mr W didn’t agree and I’ve summarised his response below; • The disposable income Valour calculated was unrealistic and incorrect due to the wrong income being used. • Valour was chasing Mr W for payment over the Christmas and New Year period. • The credit check results showed sustained arrears on a hire purchase agreement. • The Investigator concluded the checks weren’t proportionate and as such the complaint ought to be upheld. • It shouldn’t be for Mr W to prove the loan wasn’t affordable and so Valour has been rewarded for not carrying out adequate checks. • The relationship between Mr W and Valour was unfair. As no agreement could 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. We’ve set out our general approach to complaints about payday lending - including all the relevant rules, guidance and good industry practice - on our website. Valour had to assess the lending to check if Mr W could afford to pay back the amount he’d borrowed without undue difficulty. It needed to do this in a way which was proportionate to the circumstances. Valour’s checks could have taken into account a number of different things, such as how much was being lent, the size of the repayments, and Mr W’s income and expenditure.

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With this in mind, I think in the early stages of a lending relationship, less thorough checks might have been proportionate. But certain factors might suggest Valour should have done more to establish that any lending was sustainable for Mr W. These factors include: • Mr W having a low income (reflecting that it could be more difficult to make any loan repayments to a given loan amount from a lower level of income); • The amounts to be repaid being especially high (reflecting that it could be more difficult to meet a higher repayment from a particular level of income); • Mr W having a large number of loans and/or having these loans over a long period of time (reflecting the risk that repeated refinancing may signal that the borrowing had become, or was becoming, unsustainable); • Mr W coming back for loans shortly after previous borrowing had been repaid (also suggestive of the borrowing becoming unsustainable). There may even come a point where the lending history and pattern of lending itself clearly demonstrates that the lending was unsustainable for Mr W. As there was only one loan this wouldn’t apply in this complaint. Valour was required to establish whether Mr W 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 W was able to repay his loans sustainably. But it doesn’t automatically follow that this is the case. I’ve considered all the arguments, evidence and information provided in this context, and thought about what this means for Mr W’s complaint. It’s worth adding here the approach that the Financial Ombudsman takes when considering such complaints. For each loan, consideration is made as to whether the lender carried out a proportionate check. If a proportionate check was carried out, then it is likely the complaint won’t be upheld. However, deciding whether a proportionate check has or hasn’t been carried out is only the first step that is taken. If it’s decided that a proportionate check hasn’t been carried out, then we go on to consider what the lender may have seen had it made more adequate checks. What this does mean is that it’s perfectly plausible for a lender to not have carried out a proportionate check and for the complaint still not to be upheld or compensation paid. In this case, the Investigator concluded Valour’s checks didn’t go far enough but she wasn’t able to say what a more detailed check would’ve shown it. Given what I’ve said above this is a perfectly possible outcome, given what I’ve seen I am agreeing with the Investigator. Valour received details from Mr W about his income, which he declared to be £2,500 per month. Valour says it took steps to check this income through an automated validation check – this is common practice within the industry. The results of the check indicated the income Mr W had declared was likely accurate. So, I don’t think it was unreasonable for Valour to have relied on the above figure for its affordability assessment. However, Mr W says this income figure is incorrect, and he provided copy payslips to show that while his gross income was £2,500, his take home pay was closer to £2,100 per month. Mr W’s income may not have been as high as what he told Valour. But Valour’s cross check supported the income level and even if Mr W had said he earned £2,100 given the disposable income Valour calculated the loan would’ve still appeared affordable.

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As part of the application process Mr W provided Valour with details of his living costs. Valour believed Mr W’s monthly outgoings came to £1,440. To this it added a further £408.25 which was the amount of existing credit commitments Valour was told Mr W had following its credit search. It was therefore reasonable of Valour to conclude that Mr W had sufficient disposable income to afford the repayments. It’s worth adding that Mr W on a telephone call (a copy of the recorded call has been provided which I have listened to) confirmed details of his application such as employer and payday, monthly income, living situation and details of his expenditure. And Valour would have had no reason to disbelieve him given the results of its other checks. Valour also carried out a credit search, it has provided the results it received from the credit reference agency. It is worth saying here that although Valour carried out a credit search there wasn’t specific standard it had to adhere to in terms of what information it asked to receive. But what Valour couldn’t do is carry out a credit search and then not react to the to the information it received. Valour was also entitled to rely on the results it was given as it didn’t have anything to suggest the results were inaccurate. There was some adverse payment information – Valour was told that Mr W had a County Court Judgement added to his file in May 2023 and he also had four defaults added to his record – two in 2019 and two in 2022. One of these defaults had been settled. I’ve considered this adverse data but given it was more than two years since the most recent adverse judgment or default. I think it was fair and reasonable for Valour to not have been overly concerned by this information. However, the Investigator said Valour needed to be concerned about the hire purchase (HP) record. That record showed that for the last year Mr W’s account was one month in arrears – each month. But, the HP account wasn’t getting further into arrears – merely that at some point in the past Mr W for whatever reason missed a payment and had not made it up and so the account was always in a state of arrears. But what it did show is that Mr W hadn’t missed any more than one payment or was having problems each month making his payments. Indeed, Mr W was asked about this missed payment as part of the telephone call with the Valour member of staff and in my view, he provided a plausible explanation as to how this occurred – he explained the adverse was as a result of payment holiday he had used to cover a vet bill. There wasn’t any other adverse information and the other active accounts he had, including his credit cards, had been repaid as expected. The question here is whether the adverse payment information recorded about the HP agreement ought to have led to further checks – as the Investigator suggested. I think its arguable given the responses Mr W provided on the telephone call with the agent that Valour’s checks in fact did go far enough – which is contrary to what the Investigator concluded. Especially, because the missed payment on the hire purchase agreement had a plausible explanation and the arrears weren’t increasing each month. However, even if I were to conclude the checks weren’t proportionate before Valour lent to Mr W – as I set out above - I’d then go on to look at what Valour may have seen had in conducted further checks. But Mr W hasn’t provided copy bank statements or indeed any other documentation to show what his living costs were at the time of the agreement. Without that information and Mr W having been given time to provide it, I’m not in a position to say that had Valour carried out proportionate checks it would’ve likely discovered the loan was unaffordable for Mr W.

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I do think Valour may well have been able to rely on the results of its own checks to show the loan was affordable including the assurances Mr W provided on the telephone call. However, I can’t uphold the complaint solely because Valour didn’t do enough checks because I would have to be satisfied that further checks would’ve shown the loan wasn’t affordable. And I can’t conclude that, based on the information that I have to hand. I am therefore not upholding Mr W’s complaint. Mr W has said that he was chased and harassed by Valour over the Christmas and New Year period and he’s provided a copy of a letter that he has recently received. If Mr W is unhappy with the amount and type of contact that he has received he is of course free to raise these concerns with Valour directly and then subject to our jurisdiction bring the complaint here. But I would add that there isn’t a requirement within the regulations for Valour to stop or prevent collection activity while there is an ongoing complaint with the Financial Ombudsman. An outstanding balance does remain due, and I would remind Valour of its obligation to treat Mr W fairly and with forbearance. I’m therefore not upholding Mr W’s complaint about the sale of the loan. Finally, I’ve also considered whether the relationship might have been unfair under s.140A of the Consumer Credit Act 1974. However, for the reasons I’ve already given, I don’t think Valour lent irresponsibly to Mr W 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 So, for the reasons I’ve explained above, I’m not upholding Mr W’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 23 April 2026. Robert Walker Ombudsman

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