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

Decision detail

Summary

Mr P complained that NatWest lent to him irresponsibly when it approved a £25,000 loan in 2020, claiming the bank had not carried out proportionate affordability checks. NatWest defended its decision, stating it had conducted appropriate checks using Credit Reference Agency data and verified income, which indicated the loan was sustainably affordable. The ombudsman found that while NatWest could not fully evidence all its checks, the available evidence from Mr P's bank statements and credit file supported that proportionate checks were likely conducted and would have shown the loan was affordable. The ombudsman noted there is no fixed requirement for specific types of checks and that lenders may rely on proportionate checks and borrower declarations. The complaint was not upheld as there was no evidence NatWest acted irresponsibly or treated Mr P unfairly.

The Ombudsman's reasoning

The ombudsman found that while NatWest could not fully evidence all results of its checks, the available evidence (Mr P's bank statements and credit file) supported that proportionate checks were likely carried out and would have indicated the loan was affordable. The ombudsman noted there is no fixed requirement for specific checks such as bank statement or wage slip reviews, and lenders are entitled to rely on declarations and proportionate checks. Given Mr P's financial position at the time showed sufficient disposable income and good credit standing, NatWest would not have discovered or ought to have discovered that the credit would become unaffordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website