Not upheld: irresponsible lending complaint against MBNA Limited

Decision detail

Summary

Mrs H complained that MBNA irresponsibly provided her with a credit card and two credit limit increases (to £6,800 in March 2018 and £7,200 in February 2021) despite her low income, high existing debt, high card utilisation, and reliance on minimum payments. The ombudsman did not uphold the complaint, finding that based on Mrs H's bank transaction records, she had reasonable monthly disposable income after accounting for all regular expenses and existing credit commitments, enabling her to sustainably afford the credit limits. The ombudsman rejected Mrs H's claims about overdraft dependency as lacking documentary evidence and noted that MBNA's automated checks would be unlikely to capture such information. The ombudsman also found that Mrs H's consistent account management and failure to report affordability concerns to MBNA until April 2025 supported the conclusion that the lending was fair.

The Ombudsman's reasoning

The ombudsman reviewed Mrs H's bank transaction lists to understand what MBNA would likely have identified through proportionate checks. Based on this evidence, Mrs H had reasonable monthly disposable income after accounting for salary, benefits, regular non-discretionary expenses, and existing credit commitments, enabling her to sustainably afford the credit limits with headroom for unexpected costs. The ombudsman noted that balance transfers on promotional rates suggested Mrs H was refinancing on beneficial terms. While Mrs H's account balance was often close to the limit and she made minimum payments, this was not automatically concerning given her consistent contractual compliance. The ombudsman rejected Mrs H's claims about overdraft dependency, noting that annotated running balances are not documentary evidence and that automated checks would be unlikely to capture such data. The relatively low utilisation of Mrs H's total available credit limits (£3,700 of £12,150) did not raise concerns about unsecured debt levels. The ombudsman found no evidence of unfairness under Section 140A of the Consumer Credit Act 1974.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website