Not upheld: irresponsible lending - affordability complaint against Monzo Bank Limited

Decision detail

Summary

Miss Y complained that Monzo irresponsibly provided her with a £15,000 personal loan in May 2025, arguing it was unaffordable given her existing debt. Monzo had obtained Miss Y's income declaration, verified it through credit reference agencies, conducted a credit search showing well-maintained existing commitments, and estimated expenditure using statistical data. The ombudsman found Monzo's checks were proportionate for an early-stage lending relationship and that the information gathered suggested affordability. Although Miss Y later experienced difficulty with repayments, the ombudsman concluded that even more detailed inquiries about living costs would not have changed the lending decision, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Monzo carried out reasonable checks proportionate to the early stage of the lending relationship. Monzo obtained Miss Y's income, verified it through credit agencies, conducted a credit search, and estimated expenditure using statistical data. While Miss Y had existing unsecured debt, she had the option to repay some of it with the loan proceeds, which would have been in her financial interests given higher interest rates on existing debt. The ombudsman concluded that even if Monzo should have obtained more detailed information about actual living costs, this would not have changed the lending decision, as there was no persuasive evidence the loan was unaffordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website