Not upheld: irresponsible lending complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr C complained that Halifax irresponsibly approved a £4,300 credit card in July 2022 when he had irregular self-employed income and was reliant on credit with multiple high-utilisation cards. Halifax's checks revealed net monthly income of £1,932, existing credit commitments of £731, and calculated disposable income of £349, sufficient to cover estimated repayments of £215 monthly. The account was managed well with on-time payments until August 2024 when Mr C entered a Debt Management Plan, and it defaulted in January 2025. The ombudsman found Halifax's checks were proportionate and the lending decision fair, but noted Halifax could have asked further questions about essential spending. However, without evidence from Mr C about what reasonable checks would have revealed, the ombudsman could not conclude the lending was unfair and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Halifax carried out proportionate checks which revealed sufficient disposable income (£349 monthly) to afford the credit card repayments (approximately £215 monthly). While the ombudsman noted Halifax should have asked further questions about essential spending given the size of disposable income relative to the credit limit, the critical issue was that Mr C failed to provide bank statements and credit file information that would have demonstrated what reasonable checks would have found. Without this evidence, the ombudsman could not conclude the lending decision was unfair. The account was well-managed with on-time payments until August 2024, and Halifax acted with appropriate forbearance once financial difficulties emerged.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website