Not upheld: irresponsible lending complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs G complained that Lloyds acted irresponsibly by increasing her credit card limit from £11,700 to £13,000 in December 2023 and providing a personal loan shortly thereafter, when she was in or near persistent debt. Lloyds verified her income at approximately £3,095 net monthly through bank statements and calculated disposable income of around £700 after existing credit commitments and non-discretionary spending. Credit Reference Agency checks showed no arrears or defaults, and her credit card was being well-managed with regular payments above the minimum. When Mrs G reported financial difficulty in February 2025, Lloyds placed her on a repayment plan with frozen interest. The ombudsman found that Lloyds' checks were reasonable and proportionate, the lending was affordable based on the verified information, and the firm acted fairly both in its initial lending decision and subsequent forbearance. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Lloyds carried out proportionate checks appropriate to the type and amount of credit being offered. The checks verified Mrs G's income through her bank statements, reviewed her credit history via CRA data, and calculated her disposable income at around £700 per month after accounting for existing commitments and non-discretionary spending. Based on this information, the credit limit increase was affordable and the lending decision was fair. When Mrs G later reported financial difficulty, Lloyds acted with appropriate forbearance by freezing interest and arranging a repayment plan. The account did not meet the legal threshold for persistent debt, and there was nothing prior to February 2025 that should have prompted earlier intervention.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website