Not upheld: irresponsible lending and unfair credit relationship complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mr H complained that Barclaycard lent to him irresponsibly by providing high credit limits when he was experiencing financial difficulty. He held three credit cards with Barclaycard between 2012 and 2018, all of which were closed in July 2020 due to non-payment, leading to an IVA in May 2020. The ombudsman considered the complaint under Section 140A of the Consumer Credit Act 1974 as relating to an unfair credit relationship. For Cards 2 and 3, the ombudsman found Barclaycard had conducted reasonable affordability checks using validated income, credit file data, and ONS models, and that the credit limits were fair lending decisions. For Card 1, insufficient evidence from both parties prevented a conclusion. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied Section 140A of the Consumer Credit Act 1974 to assess whether the credit relationship was unfair. For Cards 2 and 3, Barclaycard gathered reasonable and proportionate information including validated income, credit file data, and ONS expenditure estimates, which indicated the credit limits were affordable relative to Mr H's income and existing debt levels. The ombudsman accepted that CRA and ONS models, while not perfect, provide reasonably reliable information used across the industry. For Card 1, insufficient evidence from both parties prevented a conclusion. The ombudsman found no evidence of unfair treatment in other respects.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website