Upheld: irresponsible lending - insufficient affordability checks complaint against Santander UK Plc
Financial Ombudsman decision DRN-6295919 of 2026-04-16T00:00:00+00:00. irresponsible lending - insufficient affordability checks complaint against Santander UK Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6295919 |
|---|---|
| Decision date | 2026-04-16T00:00:00+00:00 |
| Firm | Santander UK Plc |
| Product | credit card |
| Claim type | irresponsible lending - insufficient affordability checks |
| Outcome | Upheld |
| Remedy | Santander must rework the account removing all interest, fees, charges and insurances. If this results in a credit balance, it should be refunded with simple interest at Bank of England base rate plus 1% from the date of each overpayment. If an outstanding balance remains, Santander must arrange an affordable repayment plan. All adverse information regarding the account must be removed from Mr W's credit file upon clearance or refund. |
Summary
Mr W complained that Santander lent irresponsibly by providing a £3,800 credit card without sufficient affordability checks in November 2024. Mr W had declared income of £27,453, four existing credit cards, and £7,600 of unsecured debt. Santander did not verify employment or income and relied on a summary credit file lacking detail on the nature of existing debt. The ombudsman found the checks were not proportionate and that using FOS's published methodology for sustainable repayments (£193 monthly over 30 months at 14.9% interest), the lending would be unaffordable given Mr W's modest disposable income. The complaint was upheld and Santander was ordered to remove all interest and charges, refund any credit balance with interest, or arrange an affordable repayment plan for any outstanding balance.
The Ombudsman's reasoning
The ombudsman found that Santander's checks were not proportionate despite the relatively modest credit limit. Employment and income were not verified, and the summary credit file lacked detail on the nature of unsecured debt. Given Mr W's modest disposable income (nearly half already accounted for by living costs) and four existing credit cards, further investigation into payday loans and recent borrowing patterns should have been conducted. Using FOS's published methodology for sustainable repayments (assuming 30-month repayment period at 14.9% time-weighted average interest rate), the required monthly payment would be approximately £193, reducing disposable income to unsustainable levels. The ombudsman rejected Santander's post-hoc justification based on account spending patterns, noting it would be unfair to apply such scrutiny after lending when it was not applied before.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Santander UK Plc, all decisions | 14,445 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website