Not upheld: irresponsible lending / unaffordable lending complaint against Marks and Spencer Financial Services Plc (trading as M&S Bank)

Decision detail

Summary

Mr G complained that M&S Bank lent to him irresponsibly without adequate checks, citing escalating debt, repeated borrowing, and financial vulnerability. M&S Bank had validated his income at £32,000 annually and assessed he had sufficient disposable income to sustain the £460 monthly repayments. The ombudsman found that while Mr G was subsequently a victim of a scam involving multiple loans, M&S Bank could not have been aware of these other borrowings at the time of their lending decision because credit file updates take up to 90 days and the M&S Bank loan was the first to credit his account. The complaint was not upheld as the bank's lending decision was fair and reasonable based on information available to them.

The Ombudsman's reasoning

M&S Bank conducted proportionate checks using application data, CRA information, and modelled data. Although there were minor inconsistencies in income figures used, Mr G had sufficient disposable income to sustain repayments based on either M&S Bank's assessment or Mr G's own figures. Critically, M&S Bank could not have been aware of the other loans Mr G took out because credit files do not update within days, and the M&S Bank loan was the first to credit his account. The bank cannot be held responsible for lending decisions based on information that was not available to them at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website