Not upheld: irresponsible lending complaint against Lloyds Bank PLC

Decision detail

Summary

Ms R complained that Lloyds irresponsibly provided her with a £2,500 credit card in 2022 without carrying out proportionate checks. Lloyds verified her income, estimated her expenses using statistical data, and reviewed her CRA data, all of which showed she was managing her finances well with sufficient disposable income. Ms R later also disputed the validity of the credit agreement, claiming she never applied for it. The ombudsman found that Lloyds' checks were proportionate for the early stage of a lending relationship and the results gave no cause for concern, so the complaint was not upheld. The ombudsman noted that Ms R could separately pursue a complaint about the enforceability of the credit agreement if she wished.

The Ombudsman's reasoning

The ombudsman found that Lloyds carried out proportionate checks appropriate for the early stage of a lending relationship. The checks gathered verified income, estimated expenses using statistical data, and reviewed CRA data showing Ms R was managing existing commitments well. There was no regulatory requirement for Lloyds to conduct more detailed checks such as reviewing bank statements or pay slips. The results of the checks painted a stable financial picture with sufficient disposable income, giving no grounds for further scrutiny. The ombudsman rejected Ms R's argument that Lloyds should have forensically reviewed her overdraft use and actual expenses, noting that using an overdraft or other credit facilities does not preclude obtaining further credit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website