Partially upheld: irresponsible lending and unaffordable credit complaint against Zopa Bank Limited
Financial Ombudsman decision DRN-6300383 of 2026-05-12T00:00:00+00:00. irresponsible lending and unaffordable credit complaint against Zopa Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6300383 |
|---|---|
| Decision date | 2026-05-12T00:00:00+00:00 |
| Firm | Zopa Bank Limited |
| Product | personal loan |
| Claim type | irresponsible lending and unaffordable credit |
| Outcome | Partially upheld |
| Remedy | Zopa must calculate total repayments Miss H made against loan two and deduct them from the total amount received. If Miss H paid more than received, refund the overpayment with interest at Bank of England base rate plus 1% from date of overpayment to settlement. If capital balance remains outstanding, Zopa must work with Miss H to agree an affordable and sustainable repayment plan. Any adverse credit information relating to loan two must be removed from Miss H's credit file once outstanding amounts are paid. HMRC tax deduction applies to interest awards. |
Summary
Miss H complained that Zopa lent to her irresponsibly by providing two loans that were unaffordable given her financial circumstances. The ombudsman found that while loan one (£22,000 at 14.1% APR) was fairly lent as it would have enabled debt consolidation savings, loan two (£5,000 at 24.1% APR) was unaffordable. Zopa's own affordability checks showed Miss H had only approximately £250 in monthly disposable income after housing costs of £1,150, existing credit commitments of £1,839.25, and essential expenditure of £600, leaving insufficient funds for the £137.40 monthly repayment. The ombudsman upheld the complaint regarding loan two and ordered Zopa to refund overpayments with interest, arrange an affordable repayment plan for any outstanding balance, and remove adverse credit information.
The Ombudsman's reasoning
The ombudsman found that Zopa's own affordability checks demonstrated Miss H had insufficient disposable income to afford loan two. After accounting for net monthly income of £3,864.81, housing costs of £1,150, existing credit commitments of £1,839.25, and essential expenditure of £600, Miss H was left with only approximately £250 in disposable income, which was insufficient to cover the £137.40 monthly repayment and maintain adequate reserves for emergencies. Although the applicable rules do not require full evidence of expenditure in every case, the checks Zopa actually conducted showed the lending was unaffordable. The ombudsman concluded that Zopa did not treat Miss H fairly, did not lend responsibly, and failed to deliver a good outcome under Consumer Duty.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Zopa Bank Limited, all decisions | 558 | 27% |
Source
Read the original decision on the Financial Ombudsman Service website