Not upheld: irresponsible lending complaint against Santander UK Plc

Decision detail

Summary

Miss J complained that Santander irresponsibly lent her two personal loans: £5,500 in July 2021 for a car purchase and £10,000 in October 2022 for debt consolidation. The ombudsman found that Santander's affordability assessments were reasonable and proportionate, and based on the information available at the time, there was no evidence suggesting Miss J was likely to be unable to sustainably repay the loans. Although Miss J's financial position worsened after the loans were provided, including job loss in November 2022, the ombudsman rejected using hindsight and found no basis for upholding the complaint. The ombudsman also considered whether the lending relationship was unfair under the Consumer Credit Act 1974 but found no grounds for a different outcome.

The Ombudsman's reasoning

The ombudsman applied the FOS general approach to irresponsible lending complaints and found that Santander's checks were reasonable and proportionate given the loan amounts and Miss J's known circumstances. The affordability assessments indicated sufficient disposable income to sustainably repay both loans based on information available at the time of lending. The ombudsman rejected using hindsight regarding Miss J's subsequent financial deterioration and job loss, and found that overdraft usage alone was insufficient to establish unaffordability. The ombudsman also considered the Consumer Credit Act 1974 s.140A unfair relationship test and found no basis for a different outcome.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website