Not upheld: irresponsible lending - inadequate affordability assessment complaint against TSB Bank plc

Decision detail

Summary

Mrs R complained that TSB irresponsibly lent her £10,000 in September 2023 without conducting a proper affordability assessment. She argued TSB incorrectly relied on joint household income despite the loan being in her sole name, and that she could not afford the £307 monthly repayments on her actual income of around £730 per month. TSB could not provide evidence of the checks they claimed to have conducted. Although the ombudsman found TSB's evidence of proportionate checks insufficient and noted they likely relied on joint income despite Mrs R's husband being terminally ill, the ombudsman determined that based on Mrs R's actual verifiable income (approximately £1,290 monthly including continued pension payments), the loan would have been affordable with approximately £360 monthly disposable income remaining after all commitments. Therefore, the complaint was not upheld.

The Ombudsman's reasoning

Although TSB failed to provide sufficient evidence of proportionate checks and appears to have relied on joint household income despite the loan being in Mrs R's sole name, the ombudsman determined that even with proper checks, the loan would have been affordable. Based on bank statement analysis, Mrs R's actual sole income (including continued pension payments after her husband's death) was approximately £1,290 per month. With essential expenditure of £450, debt commitments of £175, and the new loan repayment of £307, Mrs R would have had approximately £360 monthly disposable income remaining. Therefore, TSB would still have approved the loan had they conducted proportionate checks, meaning no unfair treatment occurred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website