Upheld: Irresponsible lending complaint against Barclays Bank UK PLC trading as Tesco Bank
Irresponsible lending complaint against Barclays Bank UK PLC trading as Tesco Bank, decided 30 June 2026 by the Financial Ombudsman Service. Outcome: Upheld.
Decision detail
| Reference | DRN-6137461 |
|---|---|
| Decision date | 30 June 2026 |
| Firm | Barclays Bank UK PLC trading as Tesco Bank |
| Product | Credit card |
| Claim type | Irresponsible lending |
| Outcome | Upheld |
| Remedy | For Card 1: Card rendered unusable, all future interest waived, all interest and fees refunded (£1,213.27), adverse credit file information to be removed once balance reaches £0. For Card 2: Rework balance to refund all interest, fees and charges from outset; if balance remains, arrange suitable repayment plan; if overpayment results, return funds plus 8% simple interest; if no balance remains, remove all adverse credit file information and may reduce credit limit by compensation amount. |
Summary
Mrs P complained that Tesco Bank lent to her irresponsibly by approving two credit cards she could not afford. Tesco Bank upheld complaints relating to Card 1 and the credit limit increase on Card 2, but the unresolved issue was the initial approval of Card 2 in January 2022. The ombudsman found that Tesco Bank failed to conduct proportionate affordability checks, using an incorrect revolving debt balance (£3,625 instead of £13,092) that resulted in a false net disposable income calculation. Mrs P's actual monthly outgoings would have exceeded her income, and her pattern of behaviour on Card 1 indicated debt juggling. The complaint was upheld and Tesco Bank was directed to refund all interest, fees and charges on Card 2 and remove adverse credit file information.
The Ombudsman's reasoning
Tesco Bank failed to conduct proportionate affordability checks before approving Card 2. The firm used an incorrect revolving debt balance figure (£3,625 instead of £13,092) in its calculations, resulting in a false net disposable income of £398 per month. In reality, Mrs P's existing revolving credit and the new card would have required £2,556 in monthly outgoings against net income of £2,480, meaning she was overindebted. Additionally, Mrs P's pattern of behaviour on Card 1 (balance transfers, cash advances, minimum-only payments) demonstrated debt juggling, which should have alerted the lender to affordability concerns.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC trading as Tesco Bank, all decisions | 88 | 14% |
| Irresponsible lending, all decisions | 30,770 | 37% |
| Credit card, all decisions | 26,117 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website