Not upheld: irresponsible lending - inadequate affordability checks complaint against NewDay Ltd trading as Fluid

Decision detail

Summary

Mr T complained that NewDay irresponsibly lent to him by failing to complete appropriate affordability checks when opening a credit card account in February 2025 with a £2,500 limit and subsequently increasing it to £4,000 in August 2025. NewDay verified Mr T's income at approximately £4,500 monthly, estimated essential outgoings, and calculated a reasonable buffer of £1,350 for repayments and emergencies. The ombudsman found the initial affordability checks proportionate and the credit limit increase reasonable, as credit checks showed no recent adverse information and Mr T was making larger than minimum payments on his existing account. Although Mr T had a gambling history and his total debt was increasing, NewDay had no knowledge of the gambling and the evidence showed responsible credit management. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NewDay completed proportionate affordability checks appropriate to the lending decision. At account opening, NewDay verified income, conducted a credit check, and used statistical data to estimate essential outgoings, calculating a reasonable buffer of £1,350 monthly for repayments and emergencies. For the credit limit increase, although it was unclear what checks were completed, the ombudsman considered that proportionate checks would have shown stable income and no new adverse information, with evidence that Mr T was managing his existing credit well through larger than minimum payments. The ombudsman rejected the argument that increasing debt alone was concerning if the borrowing was being managed well.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website