Not upheld: loan application refusal and poor handling of enquiries complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Mr F complained that NatWest refused his personal loan application and that delays in explaining the decision caused him to pay additional interest on other borrowing. Mr F had made eleven applications after the initial rejection on 30 August 2025, seeking consolidation loans. NatWest cited a soft search limit but also stated Mr F failed its minimum eligibility criteria, including affordability assessments. The ombudsman found NatWest was entitled to apply lending criteria including soft search limits without disclosure, and that Mr F would likely have been rejected on affordability grounds regardless. While acknowledging NatWest could have handled enquiries better, the ombudsman concluded the £100 compensation already paid was fair and reasonable, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that NatWest was entitled to apply a soft search limit as part of its lending criteria without publishing details of it. Regardless of the soft search limit issue, Mr F would likely have been rejected on affordability grounds as he failed both policy scoring and affordability criteria. The loan checker was only a guide and provided no guarantee of approval. While NatWest could have handled enquiries better, this did not cause Mr F financial loss as he was free to seek loans elsewhere at any time. The £100 compensation already paid was fair and reasonable for the service failures.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website