Not upheld: irresponsible lending and affordability checks complaint against Vanquis Bank Limited

Decision detail

Summary

Mrs M complained that Vanquis acted irresponsibly by approving a £1,200 credit card in June 2023 and increasing the limit to £2,100 in June 2024, arguing insufficient affordability checks were conducted. She had persistent overdraft balances and undisclosed gambling transactions, and her total debt reached approximately 90% of annual income. Vanquis maintained their lending decisions were fair based on proportionate checks showing sufficient disposable income and well-managed credit. The ombudsman found the checks were reasonable and proportionate, revealing no indicators of financial difficulty, and that bank statements were not required to be reviewed, therefore not upholding the complaint.

The Ombudsman's reasoning

The ombudsman found that Vanquis carried out proportionate checks appropriate to the credit type and amount. The checks revealed sufficient disposable income (£788 monthly at account opening) to afford the credit, and Mrs M's credit file indicated well-managed existing credit. While persistent overdraft use can indicate financial stress, it was not evident as a concern based on the information available to Vanquis. Bank statements were not required to be reviewed as the proportionate checks showed no indications of financial difficulty. The credit limit increase was similarly justified by Mrs M's declared income and her demonstrated ability to manage the account well.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website