Not upheld: unfair relationship / failure to monitor repeat overdraft use and intervene complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Miss B complained that NatWest acted unfairly by continuing to provide her with an overdraft without properly assessing affordability or offering support, despite her long-term repeated use since 2018. The ombudsman considered the complaint under Section 140A of the Consumer Credit Act 1974 as relating to an unfair credit relationship and applied CONC 5D rules on monitoring repeat overdraft use. However, the ombudsman found that Miss B had maintained savings sufficient to repay the overdraft in full for several years while continuing to use it for discretionary spending, indicating use by choice rather than financial necessity. With no signs of financial difficulty and NatWest having provided regular communications about costs and support, the ombudsman concluded the relationship was not unfair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 to assess whether the credit relationship was unfair. While CONC 5D.2 requires lenders to monitor repeat overdraft use and identify customers in financial difficulties, the ombudsman found no signs of actual or potential financial difficulties. Miss B had sufficient savings to repay the overdraft in full for several years but chose not to do so, indicating use by choice rather than necessity. Her expenditure was largely discretionary, funded by regular transfers from another account. NatWest provided regular communications about overdraft costs and offered support. The ombudsman concluded the relationship was not unfair and the bank did not lend irresponsibly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website