Upheld: irresponsible lending complaint against Lloyds Bank PLC
Financial Ombudsman decision DRN-6055275 of 2026-04-16T00:00:00+00:00. irresponsible lending complaint against Lloyds Bank PLC. Outcome: Upheld.
Decision detail
| Reference | DRN-6055275 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | Lloyds Bank PLC |
| Product | Overdraft |
| Claim type | irresponsible lending |
| Outcome | Upheld |
| Remedy | Remove any adverse information about the two overdrafts from January 2023 from Mr J's credit file once any outstanding debt has been repaid. No further financial compensation ordered as Lloyds has already settled the complaint fairly. |
Summary
Mr J complained that Lloyds irresponsibly provided him with two overdraft facilities and failed to recognise they were unaffordable during annual reviews. Lloyds subsequently upheld the complaint and refunded interest and fees from January 2023 onwards, totalling £714.49, plus compensation. Additional issues arose regarding early closure of one account and failure to close another as promised, for which Lloyds provided further compensation. The ombudsman upheld the complaint but found Lloyds' settlement fair and reasonable, requiring only removal of adverse credit file information once outstanding debt is repaid.
The Ombudsman's reasoning
The ombudsman found that Lloyds acted irresponsibly in providing and maintaining the overdraft facilities without proper affordability assessment. However, Lloyds' subsequent settlement through refunds of interest, fees and charges from January 2023 onwards, combined with compensation payments, was considered fair and commensurate with FOS approach to irresponsible lending complaints. The ombudsman also found Lloyds' handling of the account closure issues and associated compensation to be appropriate. Gambling transactions were not considered excessive enough to require Lloyds to have identified them as a concern.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Lloyds Bank PLC, all decisions | 19,800 | 16% |
| Overdraft, all decisions | 3,791 | 24% |
Source
Read the original decision on the Financial Ombudsman Service website