Not upheld: irresponsible lending and proportionality of creditworthiness checks complaint against NewDay Ltd trading as Fluid

Decision detail

Summary

Mr F complained that NewDay lent to him irresponsibly by increasing his credit card limits without properly assessing his financial situation, which he claimed had deteriorated. NewDay initially rejected the complaint as out of time but offered £50 compensation and agreed to remove a hard credit search. The FOS investigator did not uphold the complaint, and Mr F requested a second opinion. The ombudsman found that while NewDay should have conducted proportionate checks on Mr F's income and expenditure at the February 2020 limit increase (given warning signs in his credit file), the absence of bank statements meant there was no evidence that such checks would have revealed unaffordability. Without this evidence, the ombudsman could not conclude the lending was unfair and upheld NewDay's offer of £50 compensation and removal of the hard search as fair resolution.

The Ombudsman's reasoning

The ombudsman found that while NewDay failed to carry out proportionate checks on Mr F's income and expenditure at the time of the February 2020 credit limit increase (given the warning signs in the credit file), the complaint could not be upheld because Mr F failed to provide bank statements that would have demonstrated what proportionate checks would have revealed. Without evidence that proportionate checks would have shown the lending to be unaffordable, the ombudsman could not conclude that NewDay made an unfair lending decision. The ombudsman also found no evidence that NewDay acted unfairly in other respects, as the account was well-maintained and Mr F did not alert NewDay to financial difficulties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website