Not upheld: Irresponsible lending complaint against Lloyds Bank Plc

Decision detail

Summary

Miss P complained that Lloyds lent her £10,300 irresponsibly when she could not afford the £348.96 monthly repayments. She argued Lloyds should have conducted more thorough checks, particularly bank statement review, given the loan was for debt consolidation and she had existing credit difficulties. Lloyds defended their lending decision, stating they had validated her income, checked her credit history, and assessed her essential spending appropriately. The ombudsman found Lloyds' checks were fair, reasonable and proportionate under CONC regulations, and that the information gathered was sufficient to make a reasonable creditworthiness assessment without requiring bank statement review.

The Ombudsman's reasoning

The ombudsman found that Lloyds conducted proportionate and reasonable checks appropriate for the loan amount and type. The checks included income validation via CRA, credit history review, assessment of existing commitments, and use of statistical data for non-discretionary spending estimation, all permitted under CONC. The fact that Miss P had one month of arrears was not concerning given the loan's consolidation purpose. The ombudsman rejected the argument that bank statements should have been reviewed, finding the information gathered was sufficient for a reasonable creditworthiness assessment. There was nothing in the information available to Lloyds suggesting Miss P would be unable to sustain repayment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website