Not upheld: irresponsible lending - inadequate affordability checks complaint against Zopa Bank Limited

Decision detail

Summary

Mr P complained that Zopa irresponsibly lent him £18,000 in August 2024 without completing adequate affordability checks. Zopa verified his declared income of £40,000 using a bank statement that did not demonstrate regular income. The ombudsman found Zopa's initial checks were not fully proportionate but concluded that had proper verification been completed, Mr P's income would have been confirmed and affordability established. Mr P's credit file showed responsible borrowing management with regular overpayments, and bank statements demonstrated substantial monthly surplus income after essential outgoings and existing commitments. The complaint was not upheld.

The Ombudsman's reasoning

While Zopa failed to complete fully proportionate affordability checks by not adequately verifying Mr P's declared income, the ombudsman found that had proper checks been conducted, Mr P would likely have been able to evidence his income. The credit file showed good borrowing management, regular overpayments on commitments, and bank statements demonstrated substantial monthly surplus income after accounting for essential outgoings, existing commitments, and the new loan repayments. Therefore, a fair lending decision was made.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website