Partially upheld: irresponsible lending - unfair credit limit increase complaint against Barclays Bank UK PLC trading as Tesco Bank
Financial Ombudsman decision DRN-6337748 of 2026-05-18T00:00:00+00:00. irresponsible lending - unfair credit limit increase complaint against Barclays Bank UK PLC trading as Tesco Bank. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6337748 |
|---|---|
| Decision date | 2026-05-18T00:00:00+00:00 |
| Firm | Barclays Bank UK PLC trading as Tesco Bank |
| Product | credit card |
| Claim type | irresponsible lending - unfair credit limit increase |
| Outcome | Partially upheld |
| Remedy | Tesco Bank must: (1) Re-work the credit card account removing all interest, fees, charges and insurances applied to balances above £2,300 after June 2022; (2) If re-work results in a credit balance, refund it as an overpayment with simple interest at Bank of England base rate plus one percentage point from date of overpayment to settlement; (3) If a balance remains after re-work, arrange an affordable repayment plan; (4) Once outstanding balance is repaid, remove any adverse information recorded on Miss F's credit file after June 2022. |
Summary
Miss F complained that Tesco Bank irresponsibly provided her with a credit card account and subsequently increased her credit limit, which she could not afford to repay, and failed to account for her vulnerability. The ombudsman found that the initial £2,300 credit limit in October 2021 was fair based on reasonable affordability checks showing declared income of £3,000 per month, estimated living costs of £611, and existing debt repayments of £633, with no adverse credit markers. However, the June 2022 increase to £4,300 was unfair as proportionate checks would have shown it was unaffordable. The ombudsman rejected Miss F's request to write off the entire balance above £2,300, as this would place her in a better position than if the lending had never occurred, instead ordering Tesco Bank to remove all interest, fees, charges and insurances on amounts above the original limit and arrange an affordable repayment plan for any remaining balance.
The Ombudsman's reasoning
The ombudsman found that Tesco Bank completed reasonable and proportionate affordability checks for the initial £2,300 credit limit, which showed Miss F had sufficient disposable income to service the debt. The credit limit was not particularly significant compared to her declared income and existing commitments, and she had demonstrated good management of existing credit. However, the June 2022 increase to £4,300 was unfair because proportionate checks at that time would likely have shown the increased limit was unaffordable. While Miss F's actual financial circumstances may have differed from what the checks revealed, Tesco Bank could reasonably rely on her declared income which was verified, and there was nothing that should have prompted further investigation for the initial lending. The ombudsman rejected writing off the entire balance above £2,300 as this would place Miss F in a better position than she would have been in had the lending not occurred, since she would never have received that money without needing to repay it.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC trading as Tesco Bank, all decisions | 66 | 11% |
Source
Read the original decision on the Financial Ombudsman Service website