Not upheld: irresponsible lending / inadequate affordability checks complaint against Zopa Bank Limited

Decision detail

Summary

Mrs S complained that Zopa irresponsibly lent her £15,000 for a consolidation loan without properly assessing her ability to repay given her existing credit commitments. Zopa claimed it had verified her income and assessed affordability using ONS data for living expenses, but failed to provide detailed evidence. The ombudsman found Zopa's checks were not properly documented and therefore not demonstrably reasonable and proportionate. However, when reconstructing what adequate checks would have shown using Mrs S's bank statements, the ombudsman concluded she had sufficient disposable income to afford the loan, which was used for its intended consolidation purpose. Mrs S maintained payments without difficulty and never contacted Zopa for assistance, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that whilst Zopa's checks were not reasonable and proportionate due to lack of documented evidence regarding income verification and ONS data used, a reconstruction of what proportionate checks would have revealed showed Mrs S had sufficient disposable income to afford the loan. The loan was for consolidation purposes which could improve her overall financial position. Mrs S maintained payments without difficulty and never contacted Zopa for assistance, indicating no unfairness in the lending decision or account handling.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website