Not upheld: irresponsible lending complaint against NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY (NatWest)

Decision detail

Summary

Miss P complained that NatWest irresponsibly lent her £12,000 in October 2024, claiming the loan was unaffordable. The ombudsman found that NatWest did not carry out proportionate checks, as they failed to verify Miss P's income or enquire about her expenditure. However, the ombudsman concluded that even with proper checks, NatWest would have approved the loan because Miss P's bank statements showed she had approximately £954 remaining monthly after accounting for non-discretionary expenses and the new loan repayment, with no signs of financial difficulty such as missed payments or arrears. The ombudsman determined that Miss P's overdraft reliance was due to non-essential spending rather than genuine financial struggle, and therefore the lending decision was fair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that NatWest failed to carry out proportionate checks by not verifying income or asking about expenditure. However, the ombudsman concluded that even if proportionate checks had been conducted, they would have revealed that Miss P could afford the loan repayments. Analysis of bank statements showed Miss P had sufficient disposable income after accounting for non-discretionary expenses and the new loan repayment, with no signs of financial difficulty such as missed payments, arrears, or defaults. The ombudsman determined that Miss P's overdraft reliance stemmed from non-essential spending rather than genuine financial struggle, and therefore NatWest would have approved the loan regardless.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website