Not upheld: irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Miss S complained that Zopa Bank Limited should not have lent to her, claiming she was overly reliant on credit and financially vulnerable. Zopa had issued a £300 credit card in January 2021 and increased the limit by £600 to £900 in August 2021. The ombudsman found that Zopa's checks using application information, CRA data, and statistical estimates were reasonable and proportionate for the type and amount of revolving credit provided. Although Miss S had five existing credit cards with 73% utilisation and a hire purchase agreement, her credit file showed no arrears or defaults, her income was validated, and she was managing her commitments. The ombudsman rejected the complaint, finding no evidence that Miss S would be unable to sustainably repay the credit.

The Ombudsman's reasoning

The ombudsman found that Zopa's checks were reasonable and proportionate under CONC rules for both the initial lending and the credit limit increase. The ombudsman noted that for a revolving credit facility, the lender must assess whether the credit limit could be repaid within a reasonable period through regular payments, not in one go. The two missed payments (each by one day) did not evidence financial difficulty but rather an oversight. The ombudsman found nothing immediately obvious in the information Zopa had which meant they should not rely on it, and there was no evidence Miss S would be unable to sustainably repay. The ombudsman acknowledged Miss S' actual circumstances might have been less sound than the evidence showed, but held that a lender cannot be liable for information they have not been told about or are not aware of.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website