Not upheld: Irresponsible lending complaint against PayPal UK Ltd

Decision detail

Summary

Mr C complained that PayPal irresponsibly provided him with a £3,300 credit card in May 2022. Mr C argued that PayPal should have reviewed his bank statements, which would have revealed his overdraft dependency and made the lending unsustainable. The ombudsman found that while PayPal did not verify income or obtain detailed expenditure information, proportionate checks for this credit limit would not have required bank statement review. Based on PayPal's knowledge of Mr C's income, spending patterns, credit search results showing no overindebtedness, and his living situation, proportionate checks would likely have shown the credit was affordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that while PayPal's checks could have been more thorough, reviewing bank statements would have been disproportionate given the credit limit size and known circumstances. Proportionate checks would likely have shown Mr C had sufficient income to meet existing commitments, essential expenditure, and reasonable repayments on the new credit. The credit search showing no overindebtedness and no arrears indicated Mr C was meeting his commitments. Overdraft usage alone, without other indicators of struggle, was not sufficient to suggest the lending would be unsustainable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website