🚫 Another Ombudsman Failure: FOS Sides with RCI Despite Zero Evidence of Affordability Checks

The Financial Ombudsman Service (FOS) is supposed to be the final, impartial authority for resolving financial disputes fairly.

But in yet another disturbing case—this time involving FOS investigator Paola Ivanova and lender RCI Financial Services (trading as Mobilize)—the system has once again failed the very people it was designed to protect.

💷 The Complaint: Irresponsible Lending and Unaffordable Finance

Our complaint focused on what we strongly believe to be irresponsible lending by RCI, who issued a motor finance agreement to our client despite clear indicators of financial distress.

FOS rightly requested that RCI evidence the affordability checks it claims were carried out before approving the finance.

RCI’s response?

They either refused or failed to provide any evidence whatsoever to FOS to support that a proper affordability assessment was conducted.

🏦 Two Bank Accounts, One Story of Hardship

Our client operates two personal bank accounts:

• One account was closed several years ago, and the issuing bank has confirmed that historic statements are no longer available due to the passage of time.
• The second, active account was fully disclosed to FOS. These statements clearly show daily overdraft charges, a constant negative balance, and financial instability.

These indicators are textbook warning signs of unaffordability, yet both RCI and the Ombudsman have chosen to disregard them.

❌ The FOS’ Decision: A Green Light for Lender Non-Compliance

Despite:

• RCI’s failure to provide any documentary evidence of affordability checks,
• The FCA’s Consumer Credit Sourcebook (CONC) placing the burden on the lender to ensure and retain proof of affordability assessments,
• And our client’s active cooperation and transparency,

FOS investigator Paola Ivanova still chose to reject the complaint.

This decision sends a dangerous message: that lenders can ignore evidence requests, refuse to cooperate, and still win.

⚖️ What the Rules Say

🔹 CONC 5.2A.4R – Creditworthiness Assessment

“A firm must undertake an assessment of the creditworthiness of the customer… including the customer’s ability to make repayments in a sustainable manner.”

🔹 CONC 5.3.1R – Record Keeping

“The firm must retain a record of the assessment… to demonstrate that it complied with its obligations.”

🔹 FOS Approach on Affordability

“We expect firms to show that they carried out proportionate checks and responded appropriately to any indications that the borrowing might be unsustainable.”

RCI has done none of this. The evidence is absent. And the Ombudsman’s ruling contradicts both its own published standards and the FCA’s regulatory expectations.

🔁 The Impact: Systemic Failure

This isn’t just a single misjudged case—it’s a pattern of systemic failure:

• RCI is in breach of regulatory obligations by failing to evidence fair lending.
• FOS is in breach of its duty to deliver fair outcomes by shifting the burden of proof to the consumer.
• The decision incentivises lenders not to cooperate, undermining the entire complaint resolution framework.

🧱 What Needs to Change

We are calling for:

• Immediate reassessment of the case by a senior Ombudsman;
• Clear consequences for lenders that fail to comply with evidence requests;
• An urgent review of the FOS’s process in handling affordability complaints, particularly where the lender fails to engage.

Until changes are made, vulnerable consumers will continue to be let down, and lenders will remain shielded from accountability.

Needless to say, the complaint has been appealed in detail.

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