Not upheld: irresponsible lending / unfair relationship under Consumer Credit Act section 140A complaint against Santander UK Plc

Decision detail

Summary

Miss B complained that Santander unfairly applied overdraft charges to her current account from 2019 onwards, claiming she was trapped in her overdraft and unable to return to a credit balance since 2020. The ombudsman assessed the complaint under section 140A of the Consumer Credit Act 1974, examining whether the lending relationship was unfair. After reviewing Miss B's account transactions, incoming credits, and discretionary spending patterns, the ombudsman found that Miss B had sufficient funds to clear the overdraft within a reasonable timeframe and held balances in other accounts. The ombudsman concluded that Miss B appeared to be choosing to use the overdraft rather than being forced to by financial circumstances, and that Santander had no objective indication of financial difficulty requiring intervention. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied section 140A of the Consumer Credit Act 1974 to assess whether the lending relationship was unfair. The key finding was that while Miss B had prolonged overdraft usage, this alone does not automatically indicate financial difficulty. The ombudsman examined whether Santander ought reasonably to have realised Miss B was in financial difficulty requiring corrective action. The analysis showed Miss B had sufficient incoming credits to clear the overdraft within a reasonable timeframe, held funds in other accounts, and engaged in significant discretionary spending. The ombudsman concluded there was no objective evidence of financial difficulty that would have required Santander to intervene, and that Miss B appeared to be choosing to use the overdraft rather than being forced to by circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website