Not upheld: irresponsible lending and unfair credit relationship complaint against Capital One Europe plc

Decision detail

Summary

Mrs V complained that Capital One irresponsibly provided her with a credit card (£200 limit in January 2019) and subsequently increased it to £450 in June 2021, causing her continued financial difficulty as she struggled to make payments. Capital One argued it had obtained information on her income and carried out credit searches showing she could afford the credit. The ombudsman found that Capital One's proportionate checks were sufficient given the low monthly repayments required, Mrs V's declared income of £25,000, the absence of adverse credit information, and her relatively well-maintained low active credit commitments. The ombudsman concluded the lending relationship was not unfair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. The ombudsman found that Capital One's proportionate checks were sufficient given the low monthly repayments required to clear balances of £200 and £450 within a reasonable period. Mrs V's declared income of £25,000, combined with the credit search showing no adverse information and low active credit being well maintained, supported the lending decisions. Mrs V's repayment record, while showing some minimum payments, was commensurate with the credit limits offered. There was no evidence that Mrs V's indebtedness was rapidly increasing uncontrollably or that the facility had become unsustainable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website