Not upheld: interest rate determination / lending decision complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr G applied for a £25,000 personal loan with HSBC in November 2025 and was offered 10.9% APR. He later discovered a missed payment marker on his credit file from October 2022 relating to a mortgage, which he believed affected his interest rate. After the missed payment was removed in error, his credit score increased significantly. Mr G complained that he should have been offered 5.9% APR and sought compensation. The ombudsman found insufficient evidence that the missed payment directly caused the higher rate, noting it was three years old at application and that HSBC's subsequent offer of 8.9% APR on a new loan was fair and reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that lenders have the right to set their own lending criteria and interest rates based on assessment of creditworthiness, repayment capacity, and financial stability. While Mr G's credit score increased after the missed payment was removed, this did not prove that HSBC would have offered 5.9% APR at the time of the November 2025 application had the missed payment not been present. The missed payment was recorded three years before the application, making direct causation unlikely. HSBC's offer of a new loan at 8.9% APR was considered fair and reasonable, and the requirement for a credit search is standard practice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website