Partially upheld: Credit file / adverse marker disputes complaint against HSBC Bank UK plc

Decision detail

Summary

Mr M applied for a personal loan expecting a 7.5% advertised rate but his initial application was declined due to a credit block. After removing the block, HSBC's agent failed to clearly explain that Mr M would need to reapply, resulting in multiple hard credit searches on his file. When Mr M reapplied, he was offered 17.9% and declined. Mr M complained that the multiple searches damaged his credit score and resulted in a higher interest rate. The ombudsman partially upheld the complaint, finding HSBC made an error in communication but rejecting the argument that the searches negatively impacted the interest rate offered. HSBC was ordered to remove the additional credit searches and pay £150 compensation.

The Ombudsman's reasoning

The ombudsman found that while the advertised 7.5% rate was only indicative and not a guarantee, HSBC made an error in failing to clearly explain that Mr M would need to reapply after the lending block was removed. The ombudsman rejected Mr M's argument that the multiple hard searches negatively impacted his interest rate, noting that the 17.9% rate offered was actually lower than the 22.9% that would have been offered on the first application, suggesting the searches did not adversely affect the assessment. The ombudsman determined that removing the additional credit searches (keeping only the 27 October search) would restore Mr M to the position he should have been in had he received proper information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website