Partially upheld: irresponsible lending - credit limit increase complaint against NewDay Ltd trading as Aqua
Financial Ombudsman decision DRN-6335557 of 2026-05-05T00:00:00+00:00. irresponsible lending - credit limit increase complaint against NewDay Ltd trading as Aqua. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6335557 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | NewDay Ltd trading as Aqua |
| Product | credit card |
| Claim type | irresponsible lending - credit limit increase |
| Outcome | Partially upheld |
| Remedy | Rework the account removing all interest, fees, charges and insurances applied to balances above £450 from January 2025 onwards. If this results in a credit balance, refund to Mr C with simple interest at Bank of England base rate plus 1% from date of overpayment. If balance still exceeds £450, arrange affordable repayment plan. Once balance cleared, remove adverse information recorded from January 2025 from credit file. |
Summary
Mr C complained that NewDay Ltd trading as Aqua lent irresponsibly when approving his credit card application in September 2024 and increasing the limit in February 2025. The ombudsman found the initial £450 credit card approval was reasonable based on proportionate affordability checks showing £773/month disposable income. However, the limit increase to £950 was upheld as irresponsible because Aqua used unreasonable figures: a CATO income of £4,907/month that was inconsistent with verified income of £2,747/month and likely reflected new borrowing, and a mortgage payment that had inexplicably reduced from £820 to £430. Bank statement analysis revealed Mr C's actual income was £2,130/month with outgoings of £2,767/month, meaning he could not afford the increased limit. The ombudsman directed Aqua to refund all interest, fees and charges on balances above £450 from January 2025 and remove adverse credit file information once the balance is repaid.
The Ombudsman's reasoning
The ombudsman found the initial credit card approval was reasonable as Aqua completed proportionate checks, verified income, found no adverse credit history, and calculated a sustainable disposable income of £773/month for a £450 limit. However, the credit limit increase to £950 was upheld as irresponsible because the figures used in the affordability assessment were unreasonable: the CATO income figure of £4,907/month was inconsistent with the verified £2,747/month from six months earlier and likely reflected new borrowing; the mortgage payment had inexplicably reduced from £820 to £430; and Mr C had incurred an overlimit fee and substantially increased unsecured debts. Bank statement analysis revealed actual income of £2,130/month and outgoings of £2,767/month, meaning Mr C's outgoings exceeded income when the limit increase was approved. Proportionate checks would have revealed this and led to declining the increase.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| NewDay Ltd trading as Aqua, all decisions | 19 | 16% |
Source
Read the original decision on the Financial Ombudsman Service website