Not upheld: irresponsible lending complaint against Marks and Spencer Financial Services PLC (trading as M&S Bank)

Decision detail

Summary

Miss K complained that M&S Bank irresponsibly provided her with a £4,000 credit card in April 2024 as it was unaffordable given her existing financial position and debts. M&S Bank had obtained information about Miss K's £22,000 annual salary, living costs, and conducted a credit search showing no significant adverse history, though she had existing credit card debts. The ombudsman found the checks were proportionate for the early stage of lending and that the revolving credit facility with 0% balance transfer rates was sustainable, particularly as Miss K could transfer existing balances at lower interest rates. The complaint was not upheld, though the ombudsman noted M&S Bank had appropriately applied a payment break when Miss K later experienced difficulty.

The Ombudsman's reasoning

The ombudsman found that M&S Bank's proportionate checks were appropriate for the early stage of a lending relationship. The credit card was a revolving facility requiring only low monthly payments rather than full repayment, and Miss K's declared income of £22,000 with no significant adverse credit history supported affordability. The 0% balance transfer offer meant Miss K would pay less interest than previously, making the lending sustainable. Even if M&S Bank had obtained more detailed expenditure information, the ombudsman was not persuaded it would have reached a different lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website