Not upheld: irresponsible lending complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr K complained that Tesco Bank lent irresponsibly when approving a £20,000 home improvement loan in December 2023. Mr K subsequently fell victim to a scam and obtained multiple loans totalling £58,000 in the following week, all of which were lost. Mr K's representatives argued Tesco Bank should have identified warning signs including three prior credit searches and a loan application with another lender made the day before. The ombudsman found that Tesco Bank's affordability assessment was reasonable, Mr K appeared to be in a strong financial position with verified income and no outstanding debts, and the prior loan application would not have been visible on the credit file at the time of assessment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank completed reasonable and proportionate affordability checks appropriate to the circumstances. The verified income of £2,400, stable mortgage position with no other debts, and calculated disposable income of £1,010 after all outgoings demonstrated Mr K appeared to be in a strong financial position. The three prior credit searches did not indicate vulnerability as there are multiple legitimate reasons for credit searches. The loan with M would not have been visible on Mr K's credit file at the time of assessment as new accounts take 4-6 weeks to report. No information available to Tesco Bank at the time of application indicated Mr K was vulnerable or that additional checks would have been proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website