Not upheld: irresponsible lending and continuous overdraft usage complaint against National Westminster Bank Public Limited (NatWest)

Decision detail

Summary

Mr F complained that NatWest irresponsibly allowed him to use his personal current account overdraft facility on a continuous, long-term basis, causing him to incur significant interest and charges. The overdraft facility was granted in April 2022 with an initial limit of £500, increased to £1,000 by August 2023, and Mr F used it almost continuously from October 2023 to March 2025. The ombudsman found that NatWest's initial affordability checks were reasonable based on application information and credit reference data, and that account statements would have supported the credit limit increases. Although Mr F showed some signs of financial stress in late 2023 and used the overdraft heavily, NatWest took reasonable steps to contact him periodically about his usage from April 2023 onwards, and Mr F did not respond to these communications. The ombudsman concluded that NatWest did not lend irresponsibly and was not required to take further steps, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate checks before granting credit and before each limit increase, and a duty to regularly review the account. The ombudsman found that NatWest's checks based on application information and credit reference data were reasonable, and that account statements would have shown sufficient disposable income to repay the credit limits sustainably. Although Mr F used the overdraft continuously and heavily from October 2023, the ombudsman found that NatWest took reasonable steps to contact him periodically about his usage, and that Mr F showed limited signs of financial stress beyond a brief period in late 2023. The ombudsman concluded that NatWest was not required to take further steps and did not lend irresponsibly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website