Not upheld: irresponsible lending complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs G complained that Lloyds acted irresponsibly by approving an £8,000 loan in December 2023 when she was already struggling financially. She argued the loan was unaffordable and that Lloyds relied on inaccurate income information and should not have increased her credit card limit simultaneously. Lloyds verified her declared income of £38,000 against her bank statements, reviewed her credit file showing no adverse history, and calculated disposable income of around £307 after all commitments. The ombudsman found the checks were reasonable and proportionate, the lending decision was fair, and once Mrs G reported difficulties in February 2025, Lloyds appropriately implemented a repayment plan with frozen interest. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for proportionate checks considering the loan type, amount, duration and total cost, as well as the borrower's circumstances. The checks needed to assess ability to afford and sustain repayment without causing financial difficulty. Lloyds' verification of declared income against statements, review of credit file showing no adverse history, calculation of disposable income of around £307, and observation of responsible credit management were all reasonable and proportionate. The decision to lend was fair based on this information. Once Mrs G disclosed financial difficulty, Lloyds' response with a repayment plan and frozen interest was appropriate forbearance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website