Not upheld: Irresponsible lending complaint against AMERICAN EXPRESS SERVICES EUROPE LIMITED

Decision detail

Summary

Miss N complained that Amex lent to her irresponsibly when providing a credit card with a £6,600 limit in 2023, arguing that insufficient affordability checks were undertaken. Amex defended their decision, stating they had carried out proportionate checks that revealed no concerns. The ombudsman found that Amex's checks, which included CRA data review and income verification, were proportionate to the amount being lent and did not reveal any cause for concern. The ombudsman concluded that Miss N's actual financial difficulties, which emerged later, were not apparent from the proportionate checks Amex conducted at the time of lending, and therefore the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for reasonable and proportionate affordability assessments that are borrower-focused and consider whether repayment would be sustainable. The checks Amex conducted were proportionate to the circumstances, including the amount of credit being lent (£6,600), and the data gathered did not reveal any cause for concern. The ombudsman found that Miss N's actual financial position, which differed from what the proportionate checks revealed, was not apparent to Amex at the time of lending. The ombudsman rejected Miss N's arguments about underestimated outgoings and high debt-to-income ratio, noting that given the absence of obvious issues from credit checks and Amex's confidence in the declared income, further verification steps were not necessary.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website