Not upheld: Irresponsible lending complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Miss S complained that NatWest irresponsibly increased her overdraft credit limit from £300 in August 2021 to £2,000 by August 2022, claiming it was unaffordable given her circumstances and existing debts. NatWest conducted income and expenditure assessments before each lending decision, obtaining credit reference agency information and calculating disposable income ranging from £115 to £719 monthly. The ombudsman found NatWest's checks were proportionate and its belief that the limits were sustainably affordable was reasonable. Although Miss S used the overdraft almost continuously and later claimed mental health issues, she did not communicate this to NatWest and her account showed no signs of financial difficulties. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate checks before lending and before each credit limit increase, and a duty to regularly review the facility. For each lending decision, NatWest's checks were proportionate and its calculations showed disposable income sufficient to support the credit limits. The account statements showed continuous overdraft use but no signs of financial difficulties. NatWest's periodic contact with Miss S about her overdraft usage was appropriate. The fact that Miss S experienced mental health issues was not communicated to NatWest and nothing in her overdraft usage pattern should have alerted the firm to this.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website