Not upheld: irresponsible lending; credit limit increase affordability; gambling harm complaint against Barclays Bank UK PLC (trading as Tesco Bank)

Decision detail

Summary

Mr M complained that Tesco Bank unfairly increased his credit limit to £16,000 in November 2021, arguing it should have been obvious he was at risk from gambling harm. The investigator partially upheld the complaint, but the ombudsman disagreed. The ombudsman found that Tesco Bank's proportionate checks were adequate: Mr M had made over £50,000 in payments in 2.5 years, credit checks showed total unsecured debt under £7,000 with no adverse information, and he had not made gambling transactions for over 18 months before the offer. The ombudsman also rejected complaints about gambling transactions processed before April 2020 and the account closure to new transactions, finding both were within Tesco Bank's rights. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank's proportionate checks were adequate for a £2,000 limit increase on an existing account. Mr M's repayment record of over £50,000 in less than two and a half years was a powerful indicator he could repay £16,000 within a reasonable 5-7 year period. The credit check showed no adverse information and low unsecured debt, indicating the limit increase was affordable. Since Mr M had not made gambling transactions for over 18 months before the offer, Tesco Bank had no obvious reason to suspect current gambling activity. Obtaining bank statements was not proportionate given the circumstances. The transaction Mr M later used for gambling was coded under a computer programming MCC, not a gambling MCC, so Tesco Bank's algorithm could not reasonably have identified it as gambling-related.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website