Not upheld: irresponsible lending complaint against NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY

Decision detail

Summary

Mrs A complained that NatWest irresponsibly provided her with a £25,000 loan in August 2023. The ombudsman found that while NatWest's checks were not fully proportionate given the loan size and expense discrepancies, the firm had verified Mrs A's income of £2,400 through account statements and had no evidence she was overindebted. The ombudsman calculated that even accounting for mortgage costs and other expenses, the loan repayments would have been affordable. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman acknowledged that NatWest's pre-lending checks were not fully proportionate given the substantial loan amount and discrepancies in expenses. However, the ombudsman concluded that if proportionate checks had been conducted, they would not have revealed the loan was unaffordable. The ombudsman verified Mrs A's declared income of £2,400 against her account statements, found no evidence of overindebtedness, and calculated that even accounting for half the mortgage costs and other regular expenses, the loan repayments would have been affordable. The ombudsman also considered the Consumer Credit Act 1974 s.140A but found no basis for unfair relationship claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website