Not upheld: irresponsible lending and unfair relationship under Section 140A Consumer Credit Act 1974 complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr F complained on behalf of his late father's estate that NatWest lent irresponsibly when providing a credit card in 2003. Mr F argued his father was already struggling financially with no income and that proper checks would have revealed unaffordability. NatWest could not provide evidence of checks completed due to the passage of time. The ombudsman found insufficient evidence to reconstruct what proportionate checks would have shown, as HMRC records only proved non-taxable income rather than no income, and bank statements were unavailable. The account was generally well-managed with overpayments until 2022, when NatWest appropriately identified persistent debt and offered support. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 to assess whether the relationship was unfair. While NatWest could not demonstrate proportionate checks were completed, the available evidence was insufficient to establish what proper checks would have revealed. The HMRC evidence of no taxable income did not prove absence of income, only that income was non-taxable. Without bank statements or clear evidence of income and expenditure, the ombudsman could not fairly conclude that proportionate checks would have revealed unaffordability. The account's subsequent management showed it was generally well-maintained until 2022, when NatWest appropriately identified and responded to persistent debt.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website