Not upheld: irresponsible lending / unaffordable credit complaint against Capital One (Europe) plc

Decision detail

Summary

Miss B complained that Capital One irresponsibly lent her a £6,000 credit card in February 2022, which she claimed was unaffordable. Capital One had verified her income at approximately £2,480 per month, obtained her declared housing costs of £400, established her debt commitments at around £400, and estimated non-discretionary expenditure at £760 using ONS data, resulting in a calculated disposable income of £685 monthly. The ombudsman found that Capital One's affordability checks were proportionate and that the firm made a fair lending decision based on the information obtained, which showed no signs of financial distress such as missed payments or arrears. The complaint was not upheld, as the ombudsman was not persuaded that Capital One would have discovered a worse financial situation through additional checks.

The Ombudsman's reasoning

The ombudsman found that Capital One's affordability checks were proportionate given the credit offered and Miss B's circumstances. The firm verified income, obtained housing costs from the applicant, established debt commitments from the credit file, and used statistical data to estimate non-discretionary spending—all of which was permitted by regulations. The resulting calculation showed disposable income of £685 per month, which provided sufficient leeway for actual expenditure to exceed average estimates. The ombudsman found no information that should have prompted further checks and was not persuaded Capital One would have discovered a worse financial situation through additional investigation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website