Not upheld: irresponsible lending and treatment of vulnerable consumer complaint against The Royal Bank Of Scotland Public Limited Company

Decision detail

Summary

Mr G complained that RBS lent to him irresponsibly by approving two credit cards in February and May 2023 that he could not afford, and failed to treat him fairly as a vulnerable consumer. RBS approved a £2,100 credit card in February 2023 and a £2,050 card in May 2023 based on Mr G's declared income and proportionate affordability checks. The ombudsman found that RBS's initial checks were proportionate and its lending decision fair, though it should have conducted deeper checks for the second application. However, bank statements showed Mr G had sufficient disposable income for both cards, and the ombudsman was not convinced more thorough checks would have changed the outcome. The complaint was not upheld, though RBS had already agreed to write off both balances as a gesture of goodwill.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to irresponsible lending, assessing whether RBS conducted proportionate checks, made fair lending decisions based on those checks, and whether it should have realised it was increasing indebtedness unsustainably. For the first card, RBS's checks were proportionate given the £2,100 limit and Mr G's declared disposable income of over £700 monthly with no adverse credit information. For the second card, while RBS should have conducted deeper checks given it was the second application in three months and Mr G was nearing his first limit, the bank statements showed sufficient disposable income remained. The ombudsman concluded that even with more thorough checks, RBS would likely have approved the second card based on the financial evidence available, and Mr G may not have disclosed his full circumstances anyway.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website