Not upheld: irresponsible lending / unfair relationship under Consumer Credit Act 1974 s.140A complaint against Barclays Bank UK PLC

Decision detail

Summary

Miss J complained that Barclays lent to her irresponsibly when providing a £24,500 interest-free consolidation loan in September 2019 to pay off an existing loan and overdraft during a period of financial difficulty following her return from the USA. Barclays had conducted an income and expenditure assessment, established Miss J had at least £250 monthly disposable income, and she had successfully maintained a prior payment plan before the consolidation loan was offered. The ombudsman assessed the complaint under unfair relationship provisions of the Consumer Credit Act 1974 due to the six-year delay in complaint submission. The ombudsman found Barclays conducted proportionate affordability checks and did not lend irresponsibly, noting Miss J maintained repayments until 2025 and the loan was provided interest-free at no cost to her. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman assessed the complaint under Section 140A of the Consumer Credit Act 1974 (unfair relationship) rather than irresponsible lending alone, as the complaint was made more than six years after the lending decision. The ombudsman found that Barclays conducted proportionate affordability checks, established Miss J had sufficient disposable income of at least £250 monthly, and Miss J successfully demonstrated ability to afford repayments through the prior payment plan. The loan was provided at no cost to Miss J (interest-free) as a supportive measure during financial difficulty. Even if lending had been irresponsible, no redress would be available as no interest or charges were applied to the loan. The ombudsman concluded Barclays did not create unfairness in the relationship.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website