Partially upheld: irresponsible lending - inadequate affordability checks complaint against Barclays Bank UK PLC
Financial Ombudsman decision DRN-6305655 of 2026-05-11T00:00:00+00:00. irresponsible lending - inadequate affordability checks complaint against Barclays Bank UK PLC. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6305655 |
|---|---|
| Decision date | 2026-05-11T00:00:00+00:00 |
| Firm | Barclays Bank UK PLC |
| Product | personal loan |
| Claim type | irresponsible lending - inadequate affordability checks |
| Outcome | Partially upheld |
| Remedy | Barclays Bank must: (1) calculate total repayments made by Miss B and deduct from total amount borrowed; (2) if overpaid, refund overpayments plus 8% simple interest per year from date of overpayment; (3) if capital balance remains, arrange affordable payment plan; (4) remove all adverse credit file information once resolved; (5) remove interest and charges from loan two agreement. |
Summary
Miss B complained that Barclays Bank irresponsibly provided two personal loans. The ombudsman upheld the complaint regarding loan two (£16,700 approved April 2025) but not loan one (£7,500 approved April 2024). For loan one, Miss B had sufficient disposable income and no warning signs. For loan two, Barclays Bank failed to conduct adequate checks despite Miss B's unsecured debt increasing to £51,700 and her employment ceasing, leaving only £385 monthly benefits income insufficient for the £449.17 repayment. The ombudsman ordered Barclays Bank to remove interest and charges, refund overpayments with 8% interest, arrange an affordable payment plan for any remaining balance, and remove adverse credit file information.
The Ombudsman's reasoning
For loan one, Barclays Bank's checks were adequate as Miss B had sufficient disposable income (approximately £1,000 monthly after expenses) to cover the £224.65 repayment, with no warning signs of unsustainability. For loan two, Barclays Bank failed to conduct proportionate checks given the significant increase in unsecured debt to £51,700 and should have discovered Miss B's employment had ceased and her only income was £385 monthly benefits, which was insufficient to cover the £449.17 monthly repayment. The pattern of multiple loan proceeds in the months preceding application should have raised concerns about debt reliance.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC, all decisions | 11,165 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website