Not upheld: irresponsible lending complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Mr E complained that NatWest lent irresponsibly when approving a £32,950 consolidation loan in July 2024. Mr E claimed the affordability assessment was based on assumptions rather than evidence and that his pattern of repeated refinancing and limited disposable income indicated irresponsible lending. The ombudsman reviewed Mr E's bank statements and found actual net monthly income of £3,502 with average outgoings of £3,530, leaving approximately £372 disposable income. The loan consolidation would reduce Mr E's credit card payments from £218 monthly to zero, demonstrating sustainability. Although NatWest could not provide full documentation of its checks, the ombudsman concluded the lending was not irresponsible and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement that lenders must complete reasonable and proportionate affordability checks before lending. Although NatWest could not provide full documentation of its checks, the ombudsman assessed what proportionate checks would have revealed by examining Mr E's bank statements. The analysis showed Mr E had regular income of £3,502 with average outgoings of £3,530, leaving approximately £372 monthly disposable income. The loan consolidation would reduce Mr E's credit card payments from £218 combined monthly to zero, improving his position. Despite limited disposable income, the statements demonstrated the repayments were sustainable and the consolidation provided a genuine benefit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website