Not upheld: irresponsible lending and unaffordable overdraft provision complaint against Nationwide Building Society

Decision detail

Summary

Mr S complained that Nationwide irresponsibly approved and continued to provide an overdraft facility that was unaffordable, claiming the firm should have identified his financial difficulties and dependency on the facility. Nationwide increased the overdraft limit from £500 to £1,250 between February and March 2022, and Mr S later complained in May 2025 about unaffordable lending. The ombudsman found that Nationwide's proportionate checks at the time were supported by Mr S's declared income of £24,000 and credit checks showing no concerning indicators. Regarding ongoing provision, the ombudsman found no obvious signs of financial difficulty in Mr S's account management, noting his balance was generally maintained within agreed limits and his overdraft utilisation actually reduced from 2023 onwards. The complaint was not upheld, with the ombudsman concluding Nationwide acted fairly and in compliance with regulatory requirements.

The Ombudsman's reasoning

The ombudsman found that Nationwide's initial checks were proportionate given the credit terms and information obtained about Mr S's financial situation. The declared income of £24,000 was supported by account turnover analysis, and credit checks revealed no concerning indicators such as recent defaults, arrears, or payday lending. The historic CCJ from 36 months prior was not considered representative of Mr S's current position. Regarding ongoing provision, the ombudsman found no obvious signs of actual or potential financial difficulties in Mr S's account management. While Mr S was a repeat user, his balance was generally maintained within agreed limits, he made timely transfers to prevent breaches, and from 2023 his overdraft utilisation actually reduced. The ombudsman concluded that the evidence did not suggest Mr S would be unable to repay the facility within a reasonable period, and that Nationwide's categorisation and regulatory compliance were reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website