Not upheld: Irresponsible lending complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss R complained that HSBC lent to her irresponsibly by approving a credit card with an initial £3,500 limit and subsequently increasing it to £4,500 and then £6,000, which she claimed she could not afford. HSBC verified Miss R's monthly income of £2,124, assessed her essential spending and housing costs, and calculated disposable income of £1,375 monthly for the initial approval and £470 monthly for the final increase. The ombudsman found HSBC's checks were reasonable and proportionate, Miss R's circumstances supported the lending decisions, and her credit management showed no signs of unsustainable repayment. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman found that HSBC's affordability checks were reasonable and proportionate for each lending decision. The initial assessment properly accounted for Miss R's living situation with parents, verified income, and calculated disposable income of £1,375 monthly, which was sufficient for the £3,500 limit. For the credit limit increases, HSBC reviewed Miss R's credit management and external credit situation, finding no indicators of unsustainable repayment. The May 2023 increase involved more extensive checks reflecting changed circumstances, with a recalculated disposable income of £470 monthly deemed suitable for the £1,500 increase. The ombudsman noted that Miss R had the opportunity to accept or decline increases, and that her later medical diagnosis was unknown to HSBC and therefore not relevant to the lending decisions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website