Not upheld: irresponsible lending complaint against Nationwide Building Society

Decision detail

Summary

Mr C complained that Nationwide irresponsibly provided him with a £10,000 personal loan in September 2018, claiming he was already overindebted and using credit for essential living costs. The ombudsman found that Nationwide's creditworthiness assessment was reasonable and proportionate, including validated income, industry-standard living cost estimates, and credit checks showing no adverse payment history. Although Mr C's financial situation deteriorated and he entered a Debt Management Plan from 2022, the ombudsman concluded Nationwide was entitled to rely on the proportionate information obtained at the time of lending and had appropriately engaged with his difficulties through forbearance measures. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Nationwide's pre-lending checks were reasonable and proportionate given the credit terms offered. The firm obtained validated income, estimated living costs using industry data, and conducted credit checks that showed Mr C was managing existing credit well with no adverse indicators. Although Mr C's financial situation may have changed after the loan was provided, Nationwide was entitled to rely on the proportionate information obtained at the time of lending. The firm also demonstrated engagement with Mr C's difficulties through forbearance measures, interest suppression, and acceptance of payment arrangements under a Debt Management Plan from 2022 onwards.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website