Upheld: irresponsible lending complaint against NewDay Ltd
Financial Ombudsman decision DRN-6315057 of 2026-04-24T00:00:00+00:00. irresponsible lending complaint against NewDay Ltd. Outcome: Upheld.
Decision detail
| Reference | DRN-6315057 |
|---|---|
| Decision date | 2026-04-24T00:00:00+00:00 |
| Firm | NewDay Ltd |
| Product | credit card |
| Claim type | irresponsible lending |
| Outcome | Upheld |
| Remedy | NewDay Ltd must: (1) Rework both the John Lewis and Debenhams credit card accounts removing all interest, fees, charges and insurances applied; (2) If a credit balance results, refund it to Mr H with 8% simple interest per year from the date of each overpayment and remove adverse credit file information; (3) If an outstanding balance remains, arrange an affordable repayment plan with Mr H and remove adverse credit file information once cleared; (4) If either debt has been sold to a third party, buy it back or liaise with the third party to ensure redress is carried out. |
Summary
Mr H complained that NewDay lent irresponsibly when approving a John Lewis credit card in November 2022 and a Debenhams credit card in September 2024. NewDay's affordability assessments were based on Mr H's stated income of £37,000 annually, but bank statement analysis revealed his actual average monthly income was £1,442-£1,567 with regular outgoings of £2,250 and £1,557 respectively. The ombudsman found that given Mr H had a recently upheld irresponsible lending complaint against NewDay (settled one month before the John Lewis application), proportionate checks would have required detailed review of his circumstances. Such checks would have revealed Mr H could not sustainably afford the new credit. The ombudsman upheld the complaint and directed NewDay to refund all interest, fees and charges applied to both accounts and either refund any credit balance or arrange an affordable repayment plan for any outstanding balance.
The Ombudsman's reasoning
The ombudsman found that while NewDay's standard affordability checks appeared to show the credit was affordable on paper, the context of Mr H's recently upheld irresponsible lending complaint meant proportionate checks required a more detailed picture of his circumstances. Review of bank statements revealed Mr H's actual income was substantially lower than declared (£1,442-£1,567 versus £2,513 claimed) and his regular outgoings either exceeded or nearly matched his actual income. This meant Mr H could not sustainably afford the new credit. The ombudsman concluded that proportionate checks would have led NewDay to decline both applications.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| NewDay Ltd, all decisions | 2,605 | 37% |
Source
Read the original decision on the Financial Ombudsman Service website