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

Decision detail

Summary

Mr H complained that Capital One irresponsibly approved a £200 credit card account in May 2024 despite his history of defaulted accounts, including previous defaults with Capital One. Capital One relied on affordability checks using credit reference agency data, ONS data, and Mr H's application information, which showed approximately £31,000 salary and over £500 monthly disposable income. The ombudsman found Capital One's decision was not irresponsible because it conducted reasonable proportionate checks, the product was specifically designed for consumers with poor credit histories, the credit limit was modest, and bank statement evidence confirmed Mr H had sufficient income and no obvious financial stress. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Capital One conducted reasonable and proportionate affordability checks using recognised sources before approving the modest £200 credit limit. Although Mr H had recent credit issues within the past 12 months, the type of product (low and grow credit card) and the very modest credit limit meant that a past poor credit history alone would not justify declining the credit. The ombudsman noted that preventing consumers from ever obtaining credit due to past defaults would be unfair and prevent them from rebuilding their credit standing. Even if Capital One had reviewed bank statements, the evidence showed Mr H had sufficient disposable income and no obvious signs of financial stress, so the lending decision would not have changed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website