Not upheld: irresponsible lending - overdraft provision and increases complaint against Lloyds Bank PLC

Decision detail

Summary

Miss M complained that Lloyds acted irresponsibly in providing an initial overdraft of £150 in July 2020 and subsequently increasing it multiple times to £1,530 by May 2022. The ombudsman examined whether Lloyds' affordability checks were adequate and proportionate. Finding that Lloyds had verified Miss M's income, calculated her disposable income after existing commitments, and established sufficient funds to support the increases, the ombudsman concluded the lender had acted responsibly. Although Miss M had missed two recent payments and later sought help when her salary stopped being paid into the account, the evidence showed she was receiving regular income and meeting commitments. The complaint was not upheld, and no further remedy was ordered.

The Ombudsman's reasoning

The ombudsman concluded that Lloyds' checks were reasonable and proportionate given the modest overdraft limits and Miss M's financial circumstances. The checks established that each increase was likely affordable and repayable on a sustainable basis. Despite two missed payments, Lloyds had verified sufficient disposable income to support the increases. Miss M was receiving regular income and meeting monthly commitments without apparent serious financial difficulty. The ombudsman found no evidence of irresponsible lending or unfair relationship under s.140A Consumer Credit Act 1974.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website