Not upheld: irresponsible lending complaint against Monzo Bank Limited

Decision detail

Summary

Mr H complained that Monzo irresponsibly lent to him by providing three loans, with the complaint focusing on Loan Three (£11,358.89 in November 2023). Mr H argued that Monzo should have identified his financial difficulties through his overdraft usage and spending patterns visible on his account. Monzo's assessment showed Mr H had disposable income of £549.17 monthly after essential expenses and existing credit commitments. The ombudsman found Monzo's checks were reasonable and proportionate, and that Mr H had sufficient income to sustain repayments, even when considering his actual bank statement income of £3,874. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Monzo's checks were reasonable and proportionate under CONC rules. Although Mr H had an arranged overdraft and some elevated spending activity in late November 2023, this did not constitute clear evidence of financial difficulty or unsustainable lending. The ombudsman noted that even if Monzo had checked Mr H's actual bank statements, they would have found higher income (£3,874) than used in the assessment, and Mr H was meeting his financial commitments without signs of distress. The ombudsman concluded Mr H had sufficient disposable income to sustain the repayments at the time of the lending decision.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website