Not upheld: irresponsible lending complaint against NewDay Ltd trading as Opus

Decision detail

Summary

Mr C complained that Opus irresponsibly lent to him when approving a £300 credit card in August 2022, citing five recent credit agreements and significant adverse credit history including a CCJ and defaults. Opus and the investigator rejected the complaint, and the ombudsman upheld their decision. The ombudsman found that Opus's proportionate checks, including CRA information and affordability modelling, were sufficient given the minimal credit limit, Mr C's declared income of £35,000, and the absence of recent adverse information or current arrears on the credit file. The ombudsman concluded that further checks such as payslips and bank statements were not warranted in these circumstances.

The Ombudsman's reasoning

The ombudsman applied the proportionality test for affordability checks, considering the type and amount of credit, borrower's income and credit history, repayment amounts and frequency, and personal circumstances. While adverse information (defaults and CCJ) existed on the credit file, it was historical (35 and 16 months old respectively). Critically, the CRA showed no recent adverse information, no current arrears, and active debt was only 2.8% of income. The credit limit of £300 was minimal (less than 1% of annual income) and the affordability assessment showed sustainable repayments. Given these factors, further checks such as payslips and bank statements were not proportionate. The ombudsman also considered Section 140A of the Consumer Credit Act 1974 but found no unfairness.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website