Not upheld: irresponsible lending and unaffordable credit complaint against MBNA Limited

Decision detail

Summary

Mrs H complained that MBNA Limited provided her with two unaffordable credit cards and credit limit increases between March 2016 and November 2018. MBNA rejected the complaint, and Mrs H referred it to the FOS. The ombudsman considered the complaint under section 140A of the Consumer Credit Act 1974 as relating to an unfair credit relationship. Although historical information was limited, the ombudsman reviewed available payslips, bank statements, and a 2018 credit file, finding no evidence that proportionate checks would have revealed the lending was unaffordable at the time. The ombudsman noted MBNA had subsequently declined most credit limit increase requests and reduced limits from 2020 onwards, demonstrating responsible risk management. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 140A-C of the Consumer Credit Act 1974 to assess whether the relationship between MBNA and Mrs H was unfair. While some information was limited due to time elapsed and data retention obligations, the ombudsman reviewed available evidence including payslips, bank statements, and a credit file. The evidence showed Mrs H had relatively consistent income in 2016, revolving credit utilisation below 50% in early 2018, and largely well-managed credit accounts. The ombudsman found no information that would have led better checks to conclude the credit limits were unaffordable. Additionally, MBNA's subsequent actions—declining most credit limit increase requests and reducing limits from 2020 onwards—demonstrated it was assessing affordability and mitigating risk.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website