Not upheld: irresponsible lending - overdraft provision and increases complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mr W complained that Halifax acted irresponsibly in providing an initial £1,000 overdraft in December 2021 and subsequently increasing it three times to £3,500 by November 2023. The ombudsman reviewed Halifax's lending checks, affordability calculations, credit checks, and account statements at each stage. Finding that the checks were reasonable and proportionate, that affordability calculations showed good disposable income, and that account statements revealed no signs of financial distress or over-extension, the ombudsman did not uphold the complaint. The ombudsman also considered the relationship under s.140A of the Consumer Credit Act 1974 but found no evidence of irresponsible lending or unfair treatment.

The Ombudsman's reasoning

The ombudsman found that Halifax's checks at the initial overdraft stage and at each increase were reasonable and proportionate. The affordability calculations and credit checks indicated the overdraft was likely to be affordable and repayable on a sustainable basis. Review of account statements did not reveal over-extension of borrowing or signs of financial distress that would have required intervention. The ombudsman also considered the relationship under s.140A of the Consumer Credit Act 1974 but found no evidence of irresponsible lending or unfair treatment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website