Not upheld: irresponsible lending complaint against Lloyds Bank PLC

Decision detail

Summary

Mr N complained that Lloyds lent irresponsibly when approving his £2,100 loan application in October 2022 with monthly repayments of £71.15. Lloyds verified Mr N's stated income of £2,108 per month through a credit reference agency, obtained a clean credit file showing no adverse information or outstanding debts, and calculated disposable income of £1,477 after estimated outgoings. Although Mr N was suffering serious mental health difficulties and bereavement at the time of application, the ombudsman found these circumstances would not have been apparent to Lloyds based on the financial information obtained. The ombudsman upheld Lloyds' position that it completed proportionate checks and reasonably approved the loan, finding the repayments were modest relative to the verified income and calculated disposable income.

The Ombudsman's reasoning

The ombudsman found that Lloyds completed proportionate and reasonable checks appropriate to the circumstances. The income figure was verified by a third-party service, the credit file showed financial stability with no adverse information, and the calculated disposable income of £1,477 was substantial compared to the modest monthly repayments of £71.15. The ombudsman concluded that while Mr N was experiencing personal difficulties, these would not have been apparent to Lloyds based on the information obtained during the application process, and the financial information indicated Mr N could sustainably afford the loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website