Not upheld: Irresponsible lending complaint against Conister Bank Limited

Decision detail

Summary

Miss R complained that Conister Bank irresponsibly granted her a hire purchase agreement for £8,844 (60 monthly payments of £273.91) in March 2018 without conducting adequate affordability checks. The bank had identified credit history issues including county court judgments and defaulted accounts but did not investigate her committed expenditure. The ombudsman found the bank's checks were not proportionate; however, analysis of Miss R's bank statements revealed household income of approximately £3,100 monthly with committed expenditure of around £1,620, demonstrating the agreement was affordable and sustainable. The complaint was not upheld as better checks would have supported the lending decision, and the bank appropriately supported Miss R when she later faced pandemic-related difficulties.

The Ombudsman's reasoning

Although Conister Bank failed to carry out proportionate affordability checks given Miss R's credit history, the ombudsman examined what better checks would have revealed using bank statements. Analysis showed Miss R had household income of approximately £3,100 monthly with committed expenditure of around £1,620, leaving sufficient disposable income to afford the new £273.91-£323.91 monthly payments. The ombudsman concluded that better checks would likely have shown the agreement was affordable and sustainable, and that Conister Bank acted appropriately in supporting Miss R when she later experienced pandemic-related difficulties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website