Not upheld: irresponsible lending - unaffordable overdraft provision complaint against National Westminster Bank plc

Decision detail

Summary

Mr S complained that NatWest should not have continued providing him with an overdraft from January 2023 onwards as it was unaffordable. The overdraft had been in place since 2007 and increased over time to £1,600. From June 2023, Mr S began making regular use of the overdraft with increased frequency from September 2023, though he typically returned to credit when income was received. The ombudsman found that whilst overdraft use was regular, there were no clear indicators of financial distress or over-reliance that would have required NatWest to intervene. Mr S was managing other loan repayments and NatWest's monitoring and review procedures were adequate. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FOS general approach to unaffordable or irresponsible lending and the Consumer Credit Sourcebook (CONC) guidance distinguishing between repeat overdraft use indicating financial difficulty and repeat use that does not. The ombudsman found that whilst Mr S made regular overdraft use from June 2023, the pattern did not demonstrate clear indicators of financial distress. Mr S was able to return to credit regularly, was managing other loan repayments, and there was insufficient evidence that NatWest should have been aware his financial situation was deteriorating. The monitoring and review steps taken by NatWest in October 2023 and October 2024 were adequate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website