Not upheld: irresponsible lending and unfair relationship complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Miss C complained that Halifax provided her with an unaffordable overdraft that increased from £700 in January 2017 to £2,200 by January 2020. She argued the overdraft was unaffordable based on her income and that her prolonged overdraft usage should have raised concerns. Halifax and the FOS investigator did not uphold the complaint. The ombudsman found that Halifax's affordability checks in 2017 and 2019-2020 were reasonable and proportionate, with Miss C's declared income supporting the limits offered. Although Miss C remained overdrawn for extended periods, particularly from November 2022 to April 2024, the ombudsman determined that analysis of her overall financial position, including income transferred to a joint account where household expenses were paid, showed she had approximately £625 in disposable income and could afford sustainable repayments. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Halifax's affordability checks in 2017 and 2019-2020 were reasonable and proportionate given the circumstances and income declared. While Miss C remained consistently overdrawn, particularly from November 2022 onwards, the ombudsman determined this did not necessarily indicate financial difficulty. Analysis of Miss C's overall financial position, including income transferred to a joint account where household expenses were paid, showed she had sufficient disposable income (approximately £625) to afford sustainable repayments. The ombudsman noted that prolonged overdraft use alone is not conclusive evidence of financial difficulty and must be considered alongside the customer's overall financial position. Halifax's monitoring and outreach efforts were appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website