Not upheld: irresponsible lending and failure to consider vulnerability complaint against NewDay Ltd trading as Aqua

Decision detail

Summary

Mr S complained that Aqua lent to him irresponsibly by failing to conduct sufficient affordability checks when issuing a credit card and subsequently increasing its credit limit twice. Mr S claimed that proper checks would have revealed two active CCJs on his credit file and that Aqua breached its own policy against lending to those with active CCJs within 36 months. He also complained that Aqua failed to account for his vulnerability as a customer. The ombudsman found that credit reports from two external agencies showed no CCJs or adverse information at any stage, meaning Aqua had no visibility of any CCJ and therefore could not have breached its policy. Affordability calculations demonstrated sufficient disposable income for sustainable repayments, and no evidence showed Aqua was made aware of Mr S's vulnerability. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Aqua's checks were reasonable and proportionate because: (1) the credit reports from two agencies showed no CCJs or other adverse information; (2) Aqua had no visibility of any CCJ and therefore could not have breached its own policy; (3) affordability calculations showed sufficient disposable income for sustainable repayments; (4) the initial credit limit was low and subsequent increases were relatively small; (5) no evidence was provided that Aqua was made aware of Mr S's vulnerability. The ombudsman concluded that the absence of adverse information on the credit files meant Aqua had no reason to look beyond the two credit reference sources already accessed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website