For several months QuickQuid has been refusing to consider any affordability complaints about loans made after March 2015.
First it rejects a refund on any of these recent loans when a customer complains. Here is an example of how QuickQuid even classifies these loans separately in its reply to a complaint:
Then, when a customer takes the case to the Financial Ombudsman (FOS), QuickQuid appears to be routinely rejecting adjudicator decisions that include refunds on these post-2015 loans.
This now affects a large number of FOS cases. Many Debt Camel readers are worried about what is going to happen to complaints which include these recent loans.
New FOS decision says QQ should refund recent loans
This week a reader has sent me a final FOS decision, not yet published on the Ombudsman decisions website.
I am only including extracts that relate to the general question of “post 2015 loans” rather than looking at all the details of the specific case.
The number of loans
B was given eight loans by QuickQuid. There was a small one in 2012 which was not considered for a refund, then a long gap. From 2016 to 2018 there were seven loans. Loans 4-8 were all topped up at least once.
Proportionate checks on loans after 2015
The Ombudsman wrote in the decision:
“I think proportionate checks would vary in the circumstances of each loan. So I have looked at each loan individually. In looking at each loan I think it’s reasonable to say a responsible lender would require more assurance the greater the risk to the consumer of the loan being unsustainable. So, for example, I’d expect a lender to seek more assurance by carrying out more detailed checks:
- the higher the loan amount,
- the lower the consumer’s income; or
- the longer the lending relationship.
… Along with its earlier submissions, QuickQuid provided a document setting out, in general terms, how its affordability assessments worked at the time it approved these loans. It has said that (as of 1 March 2015) “all loan offers now meet the FCA rate cap and affordability rules.”
In response to our adjudicator, it said: “In response to FOS’s assessment which recommends that QuickQuid uphold loans which were funded after March 2015, we regret to inform you that we cannot agree to FOS recommendations.”
In short, QuickQuid seems to be saying that because it reviewed its processes and incorporated regulatory changes as it was required to, all loans for all customers granted from 1 March 2015 onwards were granted responsibly and its checks were always proportionate.
I don’t agree with this argument. It doesn’t follow that a firm cannot have treated any customer unfairly simply because it has been authorised and is regulated by the FCA. The FCA isn’t prescriptive about what checks a lender should carry out. … it gives examples in CONC about what might be appropriate. But a lender should still bear in mind both the consumer’s circumstances and the particulars of the loan in question. It doesn’t follow that being authorised means doing the same checks, each and every time, is proportionate – whatever the circumstances of the potential borrower and the particulars of the loan. In effect. QuickQuid is asking me to pre-judge the complaint on the basis of its current lending model. And I am not prepared to do that.
This is not least because there are also other considerations which I am required to take into account when making determinations on complaints.
DISP 3.6.1R says “The Ombudsman will determine a complaint by reference to what is, in his opinion, fair and reasonable in all the circumstances of the case.”
So, I am required to consider more than the relevant rules and guidance. I must take these into account. But I will do so in considering the broader questions of whether QuickQuid treated B fairly and reasonably.
… There is nothing in the information QuickQuid has provided to suggested it reacted to B’s changing situation. Simply put, it carried out the same checks for a £1,150 loan with a £1,674 repayment as it did for a much earlier, smaller £200 loan with a £250 repayment. I can’t see how, in B’s circumstances, this was proportionate.”
The Ombudsman’s decision was that all loans and top-ups after the top up of loan 4 were to be refunded.
Implications for other cases
If you have an affordability complaint which includes some QuickQuid loans after March 2015, I think you can see clearly from the above extracts that FOS does not agree with QQ that these loans must have been correctly checked.
Instead your individual case needs to be considered, including the loan details, your lending history and your circumstances. For QuickQuid to say what amounts to “No refund – after 2015 we got all our lending decisions right” is not a reasonable approach to complaint handling.
I hope QuickQuid will listen to the ombudsman’s comments in this case and apply them to other complaints. That is what the FCA’s rules say it should do. I think QuickQuid should:
- review all the post 2015 cases where there have been adjudicator decisions and reassess whether to accept them;
- review all cases that have been sent to FOS and decide whether to make an offer on the post 2015 loans.