Not upheld: irresponsible lending - inadequate affordability checks complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr H complained that Barclays irresponsibly lent him £31,000 in January 2025 without conducting adequate affordability checks. The ombudsman examined whether Barclays' checks were proportionate given the loan amount, duration (84 months), and monthly repayments (£492.45). Based on Mr H's pension income of approximately £1,745 monthly, existing credit commitments of £318.50, absence of housing costs, and remaining funds of around £935 for essential expenses, the ombudsman concluded the loan was sustainably affordable at the time of application. Although Mr H subsequently struggled with repayments due to cost of living increases, the ombudsman found no evidence of irresponsible lending and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the proportionality test for affordability checks, considering the loan amount, repayment size, duration, and Mr H's circumstances. While Barclays used estimations for some expenses and the exact methodology was unclear, the ombudsman found that with monthly income of £1,745, existing credit commitments of £318.50, no housing costs, and £935 remaining for essential expenses, the loan was sustainably affordable at the time of application. The ombudsman rejected arguments based on subsequent cost of living difficulties and third-party opinions, finding no evidence of irresponsible lending.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website