Not upheld: unfair decline of loan application; lack of disclosure of decision reasoning complaint against Zopa Bank Limited, trading as DivideBuy

Decision detail

Summary

Mr H applied for a £13,000 interest-free loan from DivideBuy to purchase solar panels but was declined twice without clear explanation, despite having a healthy income and positive credit score. DivideBuy eventually stated the decline was on affordability grounds but provided no further detail. The ombudsman found that DivideBuy's automated lending process using credit reference agency data and internal criteria was fair and responsible, and that lenders are not obliged to disclose detailed reasoning for lending decisions. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that lenders have an obligation to lend responsibly and that DivideBuy's use of an automated process incorporating CRA data and internal lending criteria satisfied this obligation. The ombudsman found nothing in the available information suggesting the decline was unfair. The ombudsman noted that lenders are entitled to define their own lending criteria and that disclosing detailed reasoning could pose a risk to commercial integrity. Mr H was directed to contact the CRAs for information about his file.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website