Not upheld: irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Mrs M complained that Zopa Bank Limited irresponsibly provided three loans between August 2021 and August 2023 (£3,000, £8,000, and £15,000). The ombudsman examined each lending decision and found that Zopa's checks were reasonable and proportionate, Mrs M had sufficient disposable income after accounting for existing commitments, and her credit file showed accounts in good standing with no defaults or CCJs. Although Mrs M took three debt consolidation loans within two years and her overall indebtedness increased, she successfully repaid previous loans and evidence suggested she used them for their stated purpose. The ombudsman concluded there was nothing to suggest Mrs M was unable to sustainably repay the credit and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Zopa's pre-lending checks were reasonable and proportionate for each loan. For loan 1, Mrs M had sufficient disposable income and the single missed payment was not concerning in isolation. For loan 2, Mrs M's successful repayment of loan 1 and consistent financial position did not raise concerns, and the second debt consolidation loan was justified given evidence she had used the first loan for this purpose. For loan 3, although it was the third debt consolidation loan in two years and overall indebtedness had increased, Mrs M's account management was good, she had successfully used previous loans to repay debts, and the disposable income was reasonable. In all cases, there was nothing to suggest Mrs M was unable to sustainably repay the credit.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website