Not upheld: irresponsible lending complaint against Capital One (Europe) plc

Decision detail

Summary

Miss S complained that Capital One irresponsibly lent to her by providing a credit card with a £500 limit in August 2021, which she claimed was unaffordable given her circumstances. Capital One had obtained information on Miss S's income (£17,000 per annum) and conducted a credit search showing no significant adverse information. The ombudsman found that Capital One's proportionate checks were adequate for the early stage of a lending relationship and that the relatively low monthly payments required to repay the £500 revolving credit facility were affordable based on the information obtained. The complaint was not upheld as Capital One was entitled to rely on its credit checks and the information gathered, and could not have been expected to know about persistent debt on another credit card that was not reported to credit reference agencies.

The Ombudsman's reasoning

The ombudsman found that Capital One was entitled to rely on the results of its credit checks and the information gathered. Given that Miss S was provided with a revolving credit facility rather than a loan, Capital One needed to understand whether a £500 credit limit could be repaid within a reasonable period of time through low monthly payments. The declared income of £17,000 per annum, combined with no significant adverse credit information and relatively low active debt, indicated Miss S could afford the relatively low monthly payments required. Capital One could not be expected to know about persistent debt not reported to credit reference agencies.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website