Not upheld: irresponsible lending - insufficient affordability checks complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Miss F complained that Tesco Bank lent irresponsibly when granting her a £7,500 consolidation loan in September 2023, arguing that insufficient affordability checks were conducted given her existing debts and high monthly payments. Tesco Bank verified her income, assessed her outgoings using credit file data and ONS modelled datasets, and found sustainable repayments were possible. The ombudsman found that the checks were reasonable and proportionate, the credit file was broadly positive with no arrears or defaults, and the debt-to-income ratio of 86% was not atypical for consolidation lending. The ombudsman rejected Miss F's arguments that her bank statements showed a different picture, as the assessment must be based on what was known at the time of lending, not retrospective analysis. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Tesco Bank's checks were reasonable and proportionate given the amount of lending, the broadly positive credit file, and the absence of disclosed financial difficulties. The ombudsman determined that ONS datasets were an industry-recognised tool and appropriately used, especially as they were amended in Miss F's favour and cross-referenced with actual credit commitments. The ombudsman could not perform retrospective analysis with hindsight and could only assess whether the decision was fair based on what was known at the time of lending. The ombudsman rejected Miss F's arguments that her bank statements showed a different picture, that other upheld complaints should cascade to this case, and that the original position was unsustainable, finding sufficient disposable income existed for sustainable repayments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website