Not upheld: irresponsible lending complaint against Norwich Trust Limited

Decision detail

Summary

Mrs G complained that Norwich Trust Limited irresponsibly provided her with a £10,000 loan in February 2023 for debt consolidation purposes. The ombudsman found that NTL conducted thorough pre-lending checks using application data, open banking, and credit reference agency information, supplemented by direct discussions about Mrs G's income, expenditure, and financial circumstances. Mrs G had demonstrated commitment to debt reduction by settling existing commitments and reducing her overdraft limit. The ombudsman concluded there was nothing in the available information suggesting Mrs G would be unable to sustainably repay the loan, and therefore NTL did not lend irresponsibly. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NTL's pre-lending checks were reasonable and proportionate, gathering good understanding of Mrs G's income and expenditure through multiple sources. There was nothing in the information available that suggested Mrs G would be unable to sustainably repay the loan. Mrs G's stated purpose of debt consolidation was credible given her demonstrated steps to reduce outgoings and lack of history of failed consolidations. The ombudsman also considered the Consumer Credit Act 1974 s.140A but found no unfairness.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website