Not upheld: irresponsible lending and proportionality of affordability checks complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Miss G complained that Tesco Bank lent irresponsibly by approving a credit card in August 2020 and increasing the credit limit to £600 in March 2023 without proportionate affordability checks. She argued the firm should have identified her vulnerability due to ADHD and financial instability evidenced by missed payments. The ombudsman found that Tesco Bank's checks were proportionate at both stages: at account opening, Miss G had sufficient disposable income and clean credit history; at the credit limit increase, her income had increased to £2,430, external debt had decreased to £34, and she demonstrated good account management despite occasional missed payments. The ombudsman concluded there was insufficient evidence at the time of the credit limit increase to flag vulnerability, as Miss G's ADHD was not formally disclosed until November 2024. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank carried out proportionate checks at both account opening and credit limit increase stages. At account opening, Miss G had sufficient disposable income (£207 monthly) after accounting for living expenses and existing debt repayments, with the modest credit limit requiring only £25 monthly repayment. At the credit limit increase in March 2023, Miss G's income had increased significantly to £2,430 verified by CRA, her external debt had decreased to £34, and she had demonstrated good account management with occasional missed payments quickly resolved and regular overpayments. The ombudsman concluded there was nothing evident at the time of the credit limit increase that should have flagged vulnerability or sustainability concerns. Regarding forbearance, Tesco Bank appropriately followed up on missed payments, offered payment plans and holds, and tailored support when Miss G disclosed her ADHD in November 2024.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website