Not upheld: irresponsible lending and scam-related loan dispute complaint against Zopa Bank Limited

Decision detail

Summary

Mrs M was targeted by an online investment scam and persuaded to take out a £9,500 loan in June 2025. She claims the loan was unaffordable and that Zopa should write it off due to inadequate affordability checks and false income information. Zopa declined and offered £50 for complaint handling. The ombudsman found that Mrs M consented to the loan and provided false information about its purpose while following scammer instructions. Zopa completed reasonable affordability checks using credit reference data which showed acceptable disposable income and no adverse payment history. The complaint was not upheld, and Zopa was not required to write off the loan.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test given incomplete and contradictory evidence. The key finding was that Mrs M most likely consented to the loan and agreed to be bound by its terms, even though she was following scammer instructions. While Mrs M provided false information about the loan's purpose and income, Zopa was entitled to rely on the application form as accurate and completed reasonable affordability checks using available sources such as credit reference checks. The checks showed no adverse payment history and acceptable disposable income, so the loan was considered affordable at the time. The ombudsman concluded Zopa did not treat Mrs M unfairly by holding her liable for the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website