Not upheld: irresponsible lending - affordability assessment complaint against Vanquis Bank Limited

Decision detail

Summary

Mr M complained that Vanquis Bank Limited irresponsibly provided him with a £1,200 credit card in July 2024, arguing that insufficient checks were carried out and that more thorough checks would have revealed unaffordable repayments. Vanquis and the FOS investigator did not uphold the complaint. The ombudsman found that Vanquis performed reasonable and proportionate affordability checks using Mr M's declared salary of £34,000 (verified through CRA data) and existing debt information, calculating approximately £550 in disposable income after maximum card usage. Although Mr M was on a Debt Management Plan at the time, this was not visible in the CRA data reviewed, and even if known, the £50 monthly payment would have left sufficient disposable income. The ombudsman concluded that there was no evidence of financial difficulty at the time of lending and that Vanquis was not required to conduct further checks such as reviewing bank statements.

The Ombudsman's reasoning

The ombudsman applied the regulatory requirement for reasonable and proportionate affordability checks that are borrower-focused. The ombudsman found that Vanquis's use of application data and CRA information was proportionate given the circumstances, the credit limit amount, and the absence of any indicators of financial difficulty in the available information. The ombudsman concluded that even if Vanquis had been aware of the Debt Management Plan, the £50 monthly payment would still have left sufficient disposable income (approximately £500) to make the credit affordable. The ombudsman also considered whether bank statements should have been reviewed but concluded they were not necessary given what the credit checks showed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website