Not upheld: loan application process failure; credit search reporting; postal delivery issues complaint against Santander UK Plc

Decision detail

Summary

Mr K applied for an unsecured personal loan with Santander on 21 November 2025 and underwent a hard credit search. Santander sent a funds release security code by first class post, but Mr K did not receive it due to known postal issues at his address. After multiple contacts with Santander, the application expired after 28 days and the hard credit search remained on Mr K's credit file. Mr K complained that Santander should have sent the code by recorded delivery and should have removed the credit search. The ombudsman did not uphold the complaint, finding that Santander clearly disclosed the credit search requirement, correctly reported it to credit agencies, and reasonably used first class post as a fraud prevention measure. The ombudsman determined that postal delivery failures were not Santander's responsibility and that Santander reasonably offered to cancel and restart the application.

The Ombudsman's reasoning

The ombudsman found that Santander clearly disclosed that a hard credit search would be carried out as part of the application process, regardless of whether the loan proceeded. Santander is obliged to report accurate information to credit reference agencies, and the hard credit search was correctly reported. Regarding the fund release code, the ombudsman determined that Santander's process of sending the code by first class post is a reasonable fraud prevention security measure that works in the majority of cases. The ombudsman could not hold Santander responsible for postal service failures at Mr K's address, which is a matter beyond Santander's control. The ombudsman noted that Santander reasonably offered to cancel the application and remove the credit search once aware of the issue, which Mr K declined because he had sourced alternative finance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website