Not upheld: irresponsible lending and unaffordable credit complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr A complained that a credit card provided by HSBC in November 2016 with a £5,500 limit was unaffordable and caused ongoing financial difficulty. HSBC agreed it should not have increased the credit limit in October 2024 but argued the original complaint was made too late. The ombudsman found that while HSBC failed to carry out proportionate affordability checks by not enquiring into Mr A's living costs, there was insufficient evidence to conclude the credit card was unaffordable. Mr A provided only a single payslip and information about his difficulties arose after the lending decision. The complaint was not upheld, though the ombudsman reminded HSBC of its obligation to exercise forbearance given Mr A's current circumstances.

The Ombudsman's reasoning

While HSBC failed to carry out reasonable and proportionate checks by not enquiring into Mr A's regular living costs before offering the credit card, the ombudsman could not conclude the credit card was unaffordable without sufficient corroborating evidence. Mr A provided only a single payslip, which was insufficient to demonstrate unaffordability. The ombudsman noted that information about Mr A's difficulties was provided after the lending decision and was not known to HSBC at the time of application. HSBC's subsequent forbearance measures, including temporary holds and acceptance of affordable payments, were reasonable steps to address Mr A's later financial difficulties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website