Not upheld: irresponsible lending - inadequate affordability checks and failure to intervene in persistent debt complaint against NewDay Ltd trading as Aqua

Decision detail

Summary

Mr A complained that Aqua lent irresponsibly by granting a credit card and subsequently increasing the credit limit seven times over approximately seven years without adequate affordability checks, despite Mr A entering persistent debt. The ombudsman found that while some credit limit increases lacked proportionate checks, the underlying lending decisions were fair because disposable income calculations demonstrated sustainable repayments could be made. The ombudsman also found no signs of financial difficulties on the credit file that would have required Aqua to intervene under FCA regulations. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FCA's approach to irresponsible lending, requiring that credit be affordable and sustainable. While acknowledging that checks for increases one and five were not proportionate to the lending offered, the ombudsman concluded that even if proper checks had been conducted, they would have revealed sufficient disposable income to support sustainable repayments. For increases two through four and six through seven, the checks performed were deemed reasonable and proportionate. The ombudsman also found no signs of actual or possible financial difficulties as required by CONC 6.7.3 to trigger intervention obligations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website