Not upheld: irresponsible lending - credit limit increases complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss F complained that HSBC lent to her irresponsibly by allowing her to remain in persistent debt and repeatedly increasing her credit limit from £8,700 to £12,700 between 2020 and 2023. The ombudsman found that while HSBC's checks were not reasonable and proportionate as they failed to verify income and expenditure, Miss F's bank statements demonstrated sufficient disposable income after essential expenses to sustainably service the increased limits. Although the timing of the final limit increase in May 2023 (two months after a persistent debt warning) was questionable, Miss F suffered no detriment as her balance never exceeded the previous limit. The complaint was not upheld.

The Ombudsman's reasoning

While HSBC's checks were not reasonable and proportionate because they failed to verify income and expenditure, the ombudsman determined that had proper checks been conducted, Miss F's bank statements would have demonstrated sufficient disposable income after essential expenditure to sustainably service the increased credit limits. Therefore, HSBC would have reached fair lending decisions. The ombudsman noted that although the timing of CLI5 in May 2023 (two months after a persistent debt warning) seemed unusual, Miss F suffered no detriment as her highest balance never exceeded the previous limit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website