Partially upheld: Irresponsible lending complaint against NewDay Ltd
Financial Ombudsman decision DRN-6022238 of 2026-06-30T00:00:00+00:00. Irresponsible lending complaint against NewDay Ltd. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6022238 |
|---|---|
| Decision date | 2026-06-30T00:00:00+00:00 |
| Firm | NewDay Ltd |
| Product | Credit card |
| Claim type | Irresponsible lending |
| Outcome | Partially upheld |
| Remedy | NewDay Ltd must: (1) remove any interest, charges or fees applied to the BIP card on balances exceeding £3,450 from 12 February 2023 onwards; (2) if this results in a credit balance, refund it to Mr P with 8% simple interest per year from the date of each overpayment to settlement, and remove adverse information from his credit file; (3) if an outstanding balance remains, arrange an affordable repayment plan, and remove adverse information once the balance is cleared. |
Summary
Mr P complained that NewDay Ltd irresponsibly provided him with two credit cards and increased credit limits when unaffordable. NewDay initially rejected the complaint, but the FOS investigator found the third limit increase on the BIP card in February 2023 (to £4,300) and subsequent increases should not have been approved. NewDay accepted these findings. Mr P disputed the redress calculations and the timing of adverse information removal. The ombudsman upheld the complaint from the February 2023 limit increase onwards, directing NewDay to refund interest and charges on balances exceeding £3,450 from that date, with 8% interest if a credit balance results, and to remove adverse information once any remaining debt is cleared.
The Ombudsman's reasoning
The ombudsman agreed with the investigator that while the initial provision of credit and the first two limit increases were reasonable based on proportionate checks, NewDay should have conducted further checks before increasing the limit to £4,300 in February 2023. Had they done so, they would have discovered the new limit would be unaffordable. The ombudsman was satisfied with NewDay's redress calculations and found the approach to removing adverse information only after the debt is cleared to be fair and in line with FOS service standards.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| NewDay Ltd, all decisions | 2,611 | 37% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Credit card, all decisions | 26,117 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website