Upheld: irresponsible lending complaint against Santander UK Plc
Financial Ombudsman decision DRN-6203786 of 2026-04-20T00:00:00+00:00. irresponsible lending complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6203786 |
|---|---|
| Decision date | 2026-04-20T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | loan |
| Claim type | irresponsible lending |
| Outcome | Upheld |
| Remedy | Santander must rework the loan account to remove all interest, charges, and fees. The firm should calculate the adjusted balance after removing these costs and deduct all repayments Mr Z has made. If Mr Z has overpaid, Santander must refund the surplus with 8% simple yearly interest from the date of overpayment and remove all adverse credit file entries. If a balance remains outstanding, Santander must recover any debt sold to third parties, arrange an affordable repayment plan in accordance with FCA requirements for customers in financial difficulties, and remove adverse credit file entries once fully repaid. |
Summary
Mr Z complained that Santander irresponsibly approved a £10,000 loan in December 2022 without conducting adequate affordability checks. Although Santander performed a credit check, they did not verify Mr Z's declared income of £1,750 per month. When Mr Z later provided bank statements covering the period before approval, they revealed he had taken out £77,600 in loans in the preceding month, invested over £32,000 in cryptocurrency, and was regularly using overdraft facilities to cover living expenses. The ombudsman found that reasonable and proportionate checks should have included income verification given the loan's size, 5-year term, and unusual purpose (holiday), and that such checks would have revealed Mr Z's financial difficulties. Consequently, the complaint was upheld and Santander was ordered to remove all interest, charges, and fees from the loan account.
The Ombudsman's reasoning
The ombudsman found that reasonable and proportionate checks should have included verification of Mr Z's income given the large loan amount (£10,000), long repayment term (5 years), unusual purpose (holiday), and the fact that Mr Z had no existing relationship with Santander and had misrepresented his committed expenditure. Bank statements would have revealed that Mr Z was struggling financially, regularly using overdraft facilities, transferring from savings to cover living expenses, and making substantial cryptocurrency investments that appeared to be funded by borrowing. These indicators collectively demonstrated that Mr Z could not sustainably repay the credit, making the lending decision irresponsible.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,445 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website