Not upheld: Irresponsible lending complaint against Monzo Bank Limited

Decision detail

Summary

Miss O complained that Monzo irresponsibly lent to her by providing three personal loans (£5,000, £22,156.06, and £24,954.45) between June 2022 and August 2024, along with increasing credit card limits and overdraft facilities. She argued that while each loan appeared affordable in isolation, the cumulative borrowing pattern and her increasing reliance on credit should have prompted Monzo to conduct more thorough checks, particularly given Monzo's visibility of her other credit facilities. She also disclosed that her mental health was deteriorating during this period. The ombudsman found that Monzo's affordability assessments were reasonable and proportionate, that Miss O had sufficient verified income to meet her commitments, and that even with more thorough checks, the lending would likely have appeared affordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that Monzo's affordability assessments were reasonable and proportionate for each loan. Although Miss O raised concerns about cumulative borrowing and reliance on credit, the ombudsman found that based on verified income and estimated expenditure, Miss O appeared able to sustainably afford the repayments. The ombudsman acknowledged that Monzo could have conducted more thorough checks (particularly for loans two and three) but concluded that even with additional enquiries, Monzo would likely have found the lending was affordable. The ombudsman also noted that Miss O's mental health difficulties were not apparent to Monzo at the time of the lending decisions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website