Not upheld: Irresponsible lending complaint against Zopa Bank Limited

Decision detail

Summary

Miss R complained that Zopa irresponsibly lent to her by providing a credit card with a £1,000 limit in July 2023 and increasing it by £700 in September 2024, when she was already in financial difficulty. Zopa rejected the complaint, stating it had conducted affordability assessments showing sufficient disposable income. The ombudsman reviewed Miss R's bank statements and calculated approximately £850 disposable income at initial lending and £1,050 at the credit limit increase, supporting Zopa's conclusion that the borrowing was affordable. The ombudsman found the credit limits modest, Miss R's existing payments maintained, and no adverse credit indicators present, concluding Zopa's lending decisions were fair and compliant with regulatory requirements. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement that lenders conduct reasonable and proportionate affordability assessments focused on whether the borrower could repay sustainably without causing difficulties. Using Miss R's bank statements as a proxy for Zopa's missing calculations, the ombudsman determined that reasonable checks would have shown sufficient disposable income (£850 initially, £1,050 at increase) to repay the credit limits within a reasonable period. The credit limits were modest, Miss R maintained existing payments, and CRA data showed no adverse indicators. The ombudsman concluded Zopa's lending decisions were consistent with Consumer Credit sourcebook requirements and fair, noting that Zopa could not be held responsible for Miss R's undisclosed medical conditions and wider financial impacts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website