Not upheld: irresponsible lending and unaffordable credit complaint against Barclays Bank UK PLC (trading as Barclaycard)

Decision detail

Summary

Mrs B complained that Barclaycard irresponsibly provided her with a credit card (£1,500 limit in November 2015) and two subsequent credit limit increases (to £1,200 in November 2016 and £1,800 in August 2017), which she claimed were unaffordable and caused her financial difficulty. Barclaycard initially rejected the complaint as being made too late. The ombudsman considered the complaint under section 140A of the Consumer Credit Act 1974 as relating to the fairness of the lending relationship. The ombudsman found that Barclaycard obtained adequate information about Mrs B's income (£26,000 annually) and conducted credit searches showing no adverse information, making the initial lending decision reasonable. For the limit increases, Mrs B's demonstrated repayment record of over £700 in monthly payments over 17 months, combined with evidence of reduced external borrowing, supported the affordability of the increased limits. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. For the initial credit card, the declared income of £26,000 combined with a clean credit file and low required monthly repayments (£800 limit) made it reasonable for Barclaycard to lend. For the limit increases, Mrs B's demonstrated repayment record of over £700 in monthly payments over 17 months, combined with credit checks showing reduced borrowing elsewhere, supported the affordability of the increased limits. The ombudsman found no evidence that reasonable enquiries would have revealed the credit to be irresponsible or unaffordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website