Not upheld: irresponsible lending complaint against Santander UK Plc

Decision detail

Summary

Miss J complained that Santander acted irresponsibly by approving a £8,600 credit card in February 2022 without conducting sufficient affordability checks, particularly given her pattern of increasing debt and existing £4,300 Santander credit card opened four months earlier. The ombudsman found that while Santander's initial checks were not proportionate to the total credit available to Miss J, a proper analysis of her actual financial position—including net monthly income of £2,832, living costs of £281, and existing commitments—would have shown she could sustainably afford the new credit. The complaint was not upheld as the ombudsman concluded the lending decision was fair and Miss J had demonstrated responsible management of the account with no missed payments.

The Ombudsman's reasoning

While the ombudsman found that Santander's initial checks were not proportionate given the total amount of credit available to Miss J, they concluded that if reasonable and proportionate checks had been carried out, they would have shown Miss J had sufficient disposable income to sustainably afford the lending. The ombudsman calculated Miss J's actual monthly net income at £2,832, living costs of at least £281, and existing credit commitments, leaving her with approximately £917 in disposable income after accounting for the new £430 monthly payment. The absence of missed payments, defaults, or CCJs on her CRA data, combined with her good management of the existing Santander account, supported the conclusion that the lending decision was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website