Not upheld: irresponsible lending complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr H complained that Tesco Bank lent irresponsibly when approving his £12,000 loan application in September 2024. At the time of application, Mr H's credit file showed no adverse history, and Tesco Bank verified his income and assessed his affordability based on disclosed debts and those found on his credit file, concluding he could sustainably repay £271.80 monthly. Mr H later entered a Debt Management Plan in May 2025 and complained that his actual debts were significantly higher than those shown on his credit file at application. The ombudsman found that Tesco Bank's checks were proportionate and reasonable based on the information available at the point of application, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement that lenders must complete reasonable and proportionate checks before lending. The ombudsman found that Tesco Bank's verification of Mr H's income via CATO was reasonable, and that the affordability assessment appropriately considered the debts disclosed in the application plus those found on the credit file. The absence of adverse credit history, defaults, or missed payments indicated financial stability at the point of application. The ombudsman concluded the checks were proportionate to the loan amount and that the decision to lend was reasonable based on information obtained at application, not with hindsight of subsequent events.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website