Not upheld: irresponsible lending complaint against Lloyds Bank PLC

Decision detail

Summary

Mr C complained that Lloyds irresponsibly lent to him when approving a £3,100 credit card in June 2022. Mr C argued that Lloyds failed to verify his income and housing costs accurately, did not account for his existing unsecured credit commitments, and should have identified financial difficulty from his subsequent account behaviour including frequent cash withdrawals and minimum repayments. The ombudsman found that Lloyds' checks were proportionate, having verified income through industry-standard CATO, estimated living costs using modelling and CRA data, and calculated sustainable disposable income. With no adverse credit information and a reasonable credit limit relative to income, the ombudsman concluded the lending decision was fair and not upheld the complaint.

The Ombudsman's reasoning

The ombudsman found that Lloyds conducted proportionate checks appropriate to the circumstances. Income was verified through industry-standard CATO rather than merely accepted at face value. Essential living costs were estimated using modelling and CRA data showing higher figures than Mr C declared, with these higher figures used in the affordability assessment. With no adverse credit information and healthy disposable income remaining after the affordability assessment, further checks such as bank statements or direct contact were not proportionate. Subsequent account difficulties were not foreseeable based on the lending checks at the time of approval.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website