Not upheld: irresponsible lending - inadequate affordability checks complaint against Zopa Bank Limited

Decision detail

Summary

Mr W complained that Zopa irresponsibly lent him £17,000 in October 2021 without completing adequate affordability checks. He argued that proper checks would have revealed the loan was unaffordable given his existing unsecured borrowing of almost £39,000. The ombudsman found that Zopa's checks were proportionate and reasonable, verifying his income at approximately £3,900 monthly and confirming all existing borrowing was being managed well with no adverse payment history. With monthly loan repayments of £403.17 and approximately £1,545 remaining for essential expenses after accounting for all borrowing costs, the loan appeared sustainably affordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Zopa's affordability checks were reasonable and proportionate. Although Mr W had substantial existing debt of £39,000, this alone was not concerning given his verified monthly income of approximately £4,000 and the calculated monthly borrowing cost of £1,200. The absence of any adverse information on the credit check indicated Mr W was managing his existing borrowing well. With approximately £1,545 remaining monthly after loan repayments for essential expenses, the loan appeared sustainably affordable at the time of application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website