Partially upheld: irresponsible lending - inadequate affordability checks complaint against Nationwide Building Society
Financial Ombudsman decision DRN-6149115 of 2026-04-14T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against Nationwide Building Society. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6149115 |
|---|---|
| Decision date | 2026-04-14T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | personal loan |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Partially upheld |
| Remedy | Nationwide must: (1) Calculate total repayments made by Mr P and deduct from total amount borrowed; (2) If Mr P overpaid, refund overpayments plus 8% interest from date of overpayment to settlement; (3) Remove all adverse information regarding Loan 7 from Mr P's credit file; (4) If capital balance remains, arrange an affordable and suitable payment plan with Mr P; (5) Recommended (not directed) to remove adverse information once balance is cleared. |
Summary
Mr P complained that Nationwide irresponsibly lent to him through seven personal loans taken between July 2019 and December 2023. The ombudsman upheld the complaint regarding Loan 7 (£12,000 borrowed in December 2023) but not Loans 1-6. Nationwide failed to conduct proportionate affordability checks, relying on Mr P's stated income of £2,500 per month when his actual income was approximately £1,500 per month. With existing expenditure and the new loan repayment of £272.88 per month, Mr P could not afford the loan. Nationwide must refund any overpayments with 8% interest, remove adverse credit file information, and arrange an affordable payment plan for any remaining balance.
The Ombudsman's reasoning
Nationwide's checks were not reasonable and proportionate given the loan amount (£12,000) and Mr P's financial situation. Although Nationwide relied on Mr P's stated income of £2,500 and credit reference agency data, it should have conducted more detailed checks given the significant existing debt, the larger loan amount, and the long 84-month term. Mr P's actual income of approximately £1,500 per month, combined with estimated expenditure of £733.45 and new loan repayments of £272.88, meant he could not sustainably afford the loan. The firm had access to Mr P's bank statements as he was a customer, which would have revealed the true income position. The stated purpose of debt consolidation was not investigated to verify whether other credit repayments would actually decrease.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Nationwide Building Society, all decisions | 13,251 | 21% |
Source
Read the original decision on the Financial Ombudsman Service website