Partially upheld: irresponsible lending complaint against Zopa Bank Limited trading as Zopa
Financial Ombudsman decision DRN-6292231 of 2026-05-05T00:00:00+00:00. irresponsible lending complaint against Zopa Bank Limited trading as Zopa. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6292231 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | Zopa Bank Limited trading as Zopa |
| Product | personal loan |
| Claim type | irresponsible lending |
| Outcome | Partially upheld |
| Remedy | For loan three only: (1) Transfer debt back to Zopa if with recovery agent; (2) End agreement and remove all interest, fees, charges, and insurances; (3) If credit balance results, refund with Bank of England base rate plus 1% simple interest from date of overpayment; (4) If outstanding balance remains, arrange affordable repayment plan; (5) Remove all adverse information from credit file once balance cleared or credit balance refunded |
Summary
Mr M complained that Zopa irresponsibly lent to him through three loans between May 2024 and August 2025. The ombudsman found loan two was fairly lent as Mr M had no adverse credit history, a manageable debt-to-income ratio of 29.3%, and would reduce monthly repayments through consolidation. For loan three, both parties agreed the lending was irresponsible; the ombudsman upheld this but rejected Mr M's request for debt write-off, finding it was not foreseeable that he would enter a DMP. Standard irresponsible lending redress was ordered for loan three, including removal of interest and charges with credit file amendment once repaid.
The Ombudsman's reasoning
For loan two, the ombudsman found Zopa's checks were proportionate given Mr M had no adverse credit information, appeared to be managing debt well, and would save money through consolidation. The debt-to-income ratio of 29.3% did not indicate overindebtedness. Industry-standard modelling for outgoings was appropriate without further information requests. For loan three, both parties agreed it was irresponsible, so the ombudsman focused on whether redress should include debt write-off. The ombudsman found that based on the affordability assessment showing some disposable income, it was not foreseeable that Mr M would enter a DMP, so write-off was not proportionate. Standard irresponsible lending redress was appropriate.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Zopa Bank Limited trading as Zopa, all decisions | 3 | 83% |
Source
Read the original decision on the Financial Ombudsman Service website