Not upheld: irresponsible lending and unaffordable credit provision complaint against NewDay Limited (trading as Fluid)

Decision detail

Summary

Mr S complained that NewDay irresponsibly lent to him by issuing a credit card and increasing its limit three times, claiming the credit was unaffordable and that NewDay failed to provide help during financial difficulty. NewDay upheld the complaint regarding the third increase but defended the initial issuance and first two increases, arguing their affordability assessments showed sufficient disposable income. The ombudsman found NewDay's checks were reasonable and proportionate at each stage, with Mr S's declared income verified and his credit file showing no adverse indicators at the time of issuance and increases one and two. The ombudsman noted that late payment markers only appeared in October 2024, after both increases, so NewDay could not have been aware of financial difficulties when making lending decisions. The complaint was not upheld for the initial card and increases one and two, with NewDay's redress for increase three found appropriate.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate affordability checks. The ombudsman found that NewDay's checks at each stage were appropriate given the credit amount, type, and cost, and Mr S's financial circumstances as they appeared at each decision point. The ombudsman noted that lenders have discretion in how they conduct checks and may use statistical data where reasonable and proportionate. Critically, the ombudsman found that the late payment markers Mr S relied upon commenced in October 2024, well after increases one and two were made, and therefore NewDay could not have been aware of financial difficulties at the time of those decisions. The account showed no adverse indicators at the relevant times, with regular payments, no fees, and manageable credit levels.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website