Not upheld: irresponsible lending and unaffordable credit provision complaint against Zopa Bank Limited

Decision detail

Summary

Miss G complained that Zopa irresponsibly provided her with two credit cards (£400 limit in August 2022 and £1,000 limit in April 2024) without conducting adequate affordability checks, arguing the credit was unaffordable. She contended that Zopa should have obtained bank statements to verify her income and expenditure. Zopa and the FOS Investigator both found the affordability checks were reasonable and proportionate, but Miss G escalated to an Ombudsman. The Ombudsman upheld Zopa's position, finding that the checks using declared income, CRA validation, and ONS statistical data were appropriate for the credit amounts, that Miss G had sufficient disposable income at both lending stages, and that bank statements were not required by applicable rules. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied FCA CONC rules requiring reasonable and proportionate affordability checks. The ombudsman found that Zopa's reliance on declared income validated by CRA data, combined with ONS statistical data for expenditure assessment, was reasonable and proportionate given the credit amounts involved. The ombudsman rejected the requirement to obtain bank statements, noting that applicable rules do not mandate full evidence of expenditure in every case and lenders have discretion to use statistical data where reasonable. The ombudsman found Miss G had sufficient disposable income to meet repayment costs at both lending stages and that Zopa's checks showed well-maintained existing credit with nothing to suggest unsustainable repayment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website