Not upheld: irresponsible lending complaint against Santander UK Plc

Decision detail

Summary

Miss J complained that Santander lent irresponsibly when approving a £4,300 credit card in October 2021, arguing they failed to conduct sufficient affordability checks and did not identify her pattern of increasing debt. The ombudsman found Santander's initial checks were not proportionate, particularly given the credit limit size and discrepancy between declared (£48,000) and validated income (£42,896). However, upon conducting a hypothetical analysis of what reasonable checks would have revealed, the ombudsman determined Miss J had approximately £887 in monthly disposable income after accounting for living expenses, housing costs, and existing credit commitments, making the £215 monthly payment sustainable. The account performance supported this conclusion, with no missed payments and balance always remaining below the £4,300 limit. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Santander's initial checks were not proportionate given the credit limit size and income discrepancy, reasonable and proportionate checks would have revealed Miss J had sufficient disposable income (approximately £887 after living, housing and existing credit commitments) to afford the new credit with a required monthly payment of around £215. The account performance showed no signs of financial difficulty, with no missed payments, balance always below limit, and payments frequently exceeding minimums. The ombudsman concluded the lending decision was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website