Not upheld: Irresponsible lending complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr and Mrs G complained that HSBC should not have agreed to increase their joint current account overdraft to £1,500 in October 2019 or allowed them to continue using it as it was unaffordable. The ombudsman examined the case against the background of FOS time limit rules and found that HSBC's affordability checks were reasonable and proportionate. Although the account showed regular overdraft usage and occasional breaches of the limit, regular transfers from savings accounts demonstrated sufficient funds to cover direct debits and essential spending. HSBC also wrote to Mr and Mrs G about their overdraft usage on several occasions. The ombudsman concluded there was insufficient evidence of actual or potential financial distress requiring active intervention beyond written communications, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that HSBC's checks when agreeing to the overdraft increase were reasonable and proportionate, showing the credit was affordable and sustainable. Although there was regular overdraft use, the regular transfers from savings accounts demonstrated the ability to manage finances. The key issue was whether there was evidence of actual or potential financial difficulty requiring active intervention beyond written communications. The ombudsman concluded that while Mr and Mrs G had to be careful with finances, there was insufficient evidence of financial distress to require HSBC to actively intervene to reduce or remove the overdraft facility.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website