Not upheld: irresponsible lending complaint against Monzo Bank Ltd

Decision detail

Summary

Mr P complained that Monzo Bank Ltd irresponsibly provided him with a £7,000 loan in February 2023. Mr P subsequently entered a debt management plan due to financial difficulties. The ombudsman examined whether Monzo had sufficient information at the time of lending to avoid providing the loan. Finding that the loan amount was modest relative to Mr P's declared and verified income, and that his credit report showed no defaults or arrears, the ombudsman concluded that Monzo acted fairly and responsibly. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman applied the FOS general approach to irresponsible lending complaints and assessed whether Monzo had sufficient information at the time of the lending decision to avoid providing the loan. While acknowledging that Monzo's checks could have been more searching, the ombudsman found that more thorough checks would not have led Monzo to refuse the loan given the modest loan amount relative to Mr P's declared income, the confirmation of his income through their checks, and the absence of any defaults or arrears on his credit report. The ombudsman applied a point-in-time assessment and did not use hindsight regarding Mr P's subsequent financial difficulties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website