Salad exists to create a more inclusive credit market by providing consumers access to fair, affordable credit based on their current financial situation, not their credit score.
We have become the largest consumer-lending community development finance institution (CDFI) in the UK, using Open Banking, technology and our customer service team to make fair lending decisions and successfully serve workers excluded from mainstream credit because they have a low credit score or lack a credit file.
Many lenders have disappeared during the past five years. Household names collapsed under a barrage of complaints upheld against them, or because they experienced high loss rates. Were they making fair lending decisions? Did they understand whether an applicant or customer was vulnerable and if so, support them? Were their affordability checks focused on applicants’ lives and needs, or solely on customer acquisition? It wasn’t clear until it was too late.
We have always mapped our underwriting policies and approach against Financial Ombudsman Service's (FOS) longstanding and consistent regulatory principles: proportionate and borrower-focused affordability checks, sustainability of repayments, and monitoring repayment and stepping in.
So we are delighted to announce a new benchmark in consumer lending: disclosing our complaints data (checked for accuracy by our independent external auditor) within our latest annual accounts.
- By the end of 2024 we had served 94,156 customers (since launching) and received a total of 207 complaints (2.2 per thousand customers)
- During the year to the end of December 2024 we received 124 complaints (1.32 per thousand customers in this reporting period), and upheld 22 (18%) of those resolved, well below the industry sector average of 29%
- Since Salad’s inception only 29 complaints have been escalated to the FOS and only 4 of these (16%) upheld by the ombudsman, well below the industry sector average which is 34%.
- A recurring theme across the FOS upheld complaint decisions is their positive feedback about the appropriateness of open banking data in determining creditworthiness and affordability.
We encourage all lenders serving customers excluded from mainstream credit to report their customer complaints performance. Doing so will:
- Increase transparency and accountability across the sector
- Signpost businesses with more upheld complaints so applicants can make an informed choice and directors can address persistently poor decision-making
- Give social and other investors and boards a clear picture of potential risks which they can then mitigate
- Ensure that lenders who adhere to FCA regulations are not at a disadvantage to those that fail to adhere to the rules
Tim Rooney, CEO, Salad said:
“Our mission extends beyond lending: we offer meaningful and appropriate support to applicants whether or not we can lend; challenge policymakers and regulators to address problems in the wider industry; and seek to use our data for public good. This is a watershed moment in consumer lending and a challenge to others in this industry and their auditors: report your customer complaints performance.”
Our annual accounts, including more about our customer and social impact and audited complaints data, were published on the Companies House website this week.
