Not upheld: irresponsible lending complaint against Capital One (Europe) plc

Decision detail

Summary

Mr C complained that Capital One irresponsibly provided him with a credit card with a £500 limit in August 2022, claiming it was unaffordable. Capital One had obtained Mr C's income information (£30,000 per year) and conducted a credit search showing low active balances, though Mr C had previous credit difficulties including defaults and possibly a CCJ. The ombudsman found Capital One's checks were proportionate for the early stage of a lending relationship, the low credit limit mitigated risk, and Mr C's income supported affordability of the low monthly repayments required. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Capital One carried out proportionate checks appropriate for the early stage of a lending relationship. The £500 credit limit was low and required only low monthly repayments. Mr C's declared income of £30,000 per year, cross-checked against credit reference agencies, supported affordability. While Mr C had previous credit difficulties, this did not automatically mean he should not have been lent to. The low credit limit itself mitigated risk. Even if further checks into living costs had been conducted, there was no evidence this would have changed the lending decision as committed expenditure did not appear to make repayments unaffordable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website