Not upheld: irresponsible lending and credit limit increases complaint against American Express Services Europe Limited

Decision detail

Summary

Miss T complained that American Express irresponsibly provided her with a credit card in January 2021 and subsequently increased the limit multiple times, despite her being self-employed with variable income and struggling to repay. She alleged she masked financial difficulties by withdrawing cash from the card to make repayments. The ombudsman found that American Express conducted proportionate checks showing adequate income (£10,000 at approval, increasing to £52,000) and minimal external debt, with no missed payments or defaults visible. The ombudsman concluded that while Miss T may have experienced financial strain, this would not have been discoverable through reasonable checks, and the payment history supported that the lending was affordable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that American Express conducted proportionate checks appropriate to the credit limit offered. At approval, the recorded income of £10,000 with minimal external debt suggested Miss T could afford modest minimum repayments. For subsequent increases, the recorded income increases to £52,000 supported the higher limits. Although Miss T claimed financial difficulties, the card statements showed no missed payments, defaults, or clear signs of unaffordable borrowing. The ombudsman acknowledged Miss T may have been withdrawing cash to fund repayments but concluded this would not have been discoverable through reasonable checks, and the fact that repayments exceeded cash withdrawals and she could repay more than minimums supported affordability. The ombudsman rejected the argument that better checks would have revealed problems.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website