Not upheld: irresponsible lending - inadequate affordability checks complaint against Santander UK Plc

Decision detail

Summary

Mr O complained that Santander irresponsibly provided him with a £9,700 credit card in January 2025 without proper affordability checks and without discovering his gambling. Santander had obtained Mr O's declared income (over £80,000 per year) and expenditure information, used statistical averages for other costs, and found no credit repayment problems on his file. The ombudsman found Santander's checks were not reasonable and proportionate as they did not verify income, but concluded that even with proper verification showing £4,200 monthly income, the credit would likely have been provided fairly given the credit limit's proportion to income and the card's flexibility. The ombudsman rejected Mr O's argument that Santander should have reviewed bank statements to discover gambling, finding such enhanced checks would not have been proportionate in these circumstances.

The Ombudsman's reasoning

The ombudsman acknowledged that Santander's checks were not reasonable and proportionate as they relied on statistical averages rather than verifying income. However, the ombudsman concluded that proportionate checks in this case would only require income verification and use of declared expenditure with statistical information. The ombudsman found that even with proper checks, Mr O's income of £4,200 per month would have been sufficient to sustainably repay the £9,700 credit limit, especially given the card's flexibility and that it was a balance transfer product. The ombudsman rejected the argument that Santander should have conducted enhanced checks involving detailed bank statement analysis to discover gambling, finding this would not have been proportionate given the credit limit was not too large relative to income, there were no existing repayment problems, and the absence of significant outstanding credit at the time of application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website